[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Senate]
[Pages S731-S769]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ALLARD:
  S. 1635. A bill to amend the Internal Revenue Code of 1986 to reduce 
the maximum capital gains rates, to index capital assets for inflation, 
and to repeal the Federal estate and gift taxes and the tax on 
generation-skipping transfers; to the Committee on Finance.


            CAPITAL GAINS AND ESTATE TAX REFORM LEGISLATION

  Mr. ALLARD. Mr. President, I spent the month of January attending 
town meetings throughout the State of Colorado. That is one of the 
things, when I go back to my State, that I spend a lot of time doing--
visiting the counties and visiting with the people of Colorado. Over 
the years, we continue to have the issue of taxes brought up in the 
town meetings--probably more so now than at any time that I can recall 
since having town meetings.
  The American people simply want to have their tax system reformed, 
particularly those in Colorado. They want lower taxes, they want a 
simpler tax system, and they want less intrusive means of collecting 
those taxes.
  Last year, Congress enacted modest tax relief, but it was only a 
first step. It's time to move forward with more aggressive tax reform.
  Today, I am introducing legislation that will do four things:
  It will continue to reduce the capital gains tax to a top rate of 14 
percent.
  It will restore the one-year holding period for capital gains 
treatment.
  It will index capital gains and, thereby, eliminate the taxation of 
gains that are due solely to inflation.
  And then, finally, it will eliminate the estate tax.
  These changes will provide important tax relief for families and 
businesses, and continue to ensure that our economy remains the most 
competitive in the world.
  Mr. President, the new year has certainly brought good news 
concerning the Federal budget. But let's be honest. The budget is 
balancing because of the hard work of the American people, not because 
of any bold action by the Federal Government. Economic performance in 
recent years has exceeded all expectations. The result is that the 
American people have been sending greater and greater amounts of their 
earnings to Washington. The budget is balancing because of an explosion 
in tax receipts, not because of any restraint in spending. In fact, the 
budget continues to grow at a healthy pace. Federal spending in 1998 is 
estimated to be 4.3 percent above the 1997 level--well in excess of 
inflation. Many would like this to continue.
  The President assured us in a previous State of the Union Address 
that, ``the era of big Government is over.'' But it is clear that he is 
now proposing a new era of big Government.
  I favor a different course. We should not squander the people's 
surplus on more Government. Instead, we should begin to pay down the 
debt and reform the tax system. We should put American families ahead 
of the insatiable appetite of Washington, DC, for more Government 
spending.
  Despite last year's budget bill, taxes remain higher than they have 
ever been. Tax freedom day--the day to which the average American works 
to pay the combined Federal, State, and local tax burden--is May 9, 
which is the latest it has ever been. A reduction in the Federal debt 
and a reasonable level of taxation should be the twin objectives of 
Congress as we enter the next century. Our job is to ensure that the 
bridge to the 21st century does not become a toll bridge.
  Mr. President, let me begin with a discussion of capital gains taxes. 
I call the capital gains tax the ``growth tax.'' Nearly all Americans 
own capital, and they experience a tax on that capital when they sell 
the stocks, or a small business, or a farm.
  Mr. President, let's look at how this capital gains, or growth tax, 
hits ordinary working Americans. Stock ownership has doubled in the 
last 7 years, to the point where 43 percent of all adult Americans own 
stock. Obviously, with those numbers, stock ownership is not just 
confined to the wealthy; it is spread throughout society. Today, half 
of the investors are women, and half are noncollege graduates. Stocks 
are typically held for retirement, education expenses, and other long-
term goals. This is precisely the type of saving and investing that we 
need in our economy.
  Mr. President, I can't leave this topic without talking about small 
business owners and farmers. There is no clearer area where the 
``growth tax'' makes no

[[Page S732]]

sense. Millions of American families put their lives into building 
small businesses and farms. Often, those businesses or farms are sold 
to finance a decent retirement. But this can only occur after Uncle Sam 
gets his cut of one-third or more of all the gains.
  Simply put, low taxation makes it less costly to take the risks that 
are critical in a capitalist economy. I am proposing that we enact a 
maximum capital gains tax of 14 percent, with those in the lowest tax 
bracket paying only 7 percent. Last year's reduction of the capital 
gains rate was a big plus, but it came with a price--the holding period 
required to qualify for the lower tax was extended from 12 months to 18 
months.
  The holding period change is a poor attempt by the Government to 
micromanage the economy. This is the type of Government management that 
has so clearly failed in Asia. A market economy functions best when 
capital flows freely, unencumbered by Government distortions. The 
holding period for long-term capital gains treatment has been 12 months 
for years, and it should stay that way.
  Mr. President, an additional mistake that Congress made in last 
year's bill was a failure to include indexing. The real ``growth tax'' 
is often much higher than 20 percent. This is because our Tax Code does 
not protect Americans from taxation on capital gains that result from 
inflation. This is one of the most unfair aspects of the growth tax. 
Government policies contribute to inflation, and Government turns 
around and taxes its citizens on that inflation.
  For this reason, I fought hard to see that indexing was included last 
year. I offered an amendment to the tax bill that would have added 
indexing. The amendment was carefully structured to avoid any revenue 
loss. Obviously, I was disappointed with the defeat of this amendment. 
I presume that this was due largely to the President's opposition to 
indexing and his veto threat. Despite this, we got a strong vote, and I 
promised that I would be back.
  I have included indexing in this bill, and I fully intend to offer 
this at each opportunity. Some have dismissed indexing as ``too 
costly,'' but for me this is an issue of fundamental fairness. It is 
wrong for the Federal Government to tax citizens on inflation.
  Since I mentioned the issue of cost, let me make a few points on 
this. I have long maintained that a capital gains tax cut will increase 
revenue. In the short run, it encourages the sale of assets that would 
not otherwise occur. This obviously increases revenue.

  In the long run, a rate cut facilitates a higher level of economic 
growth. This also results in greater tax revenue.
  Unfortunately, during last year's tax debate, we continued to operate 
under revenue models that forecast a loss to the government from the 
capital gains rate cut.
  I hope we can soon put this notion to rest for good.
  It is already apparent that capital gains revenues will be coming 
into the Treasury at a considerably higher level than forecast last 
year when we were talking about capital gains. 1998 capital gains 
revenues could be as much as 50% higher than previously forecast.
  Even state governments will benefit from the rate cut. Earlier this 
month, analysts for the Colorado Legislature forecast that the capital 
gains tax changes would result in an additional $38 million this year 
for the Colorado state budget.
  Obviously, the impact at the federal level will be many times 
greater.


                         estate tax elimination

  The final provision in this tax bill is the elimination of the estate 
tax.
  Frankly, the estate tax makes no sense.
  While the tax raises only 1 percent of federal revenues, it destroys 
family businesses and farms.
  The estate tax is double taxation.
  At the time of a person's death, much of their farm, business, and 
life savings has already been subjected to federal, state, and local 
tax. These same assets are taxed again under the estate tax.
  The estate tax fails to distinguish between cash and non-liquid 
assets.
  Family businesses are often asset-rich, and cash poor. But the value 
of all assets must be included in the taxable estate.
  This can force liquidations, and family businesses can see their 
livelihood eliminated in order to pay a tax of up to 55 percent. Yes. 
That is right--up to 55 percent.
  This practice threatens the stability of our families and communities 
while inhibiting growth and economic development.
  The National Center for Policy Analysis reports that a 1995 survey by 
Travis Research Associates found that 51 percent of family businesses 
would have difficulty surviving the estate tax, 14 percent of business 
owners said it would be impossible to survive, 30 percent said they 
would have to sell part or all of their business.
  This is supported by a 1995 Family Business Survey conducted by 
Matthew Greenwald and Associates which found that 33% of family 
businesses anticipate having to liquidate or sell part of their 
business to pay the estate tax.
  Recently, the accounting firm Price Waterhouse calculated the taxable 
components of 1995 estates. While 21% of assets were corporate stock 
and bonds, and another 21% were mutual fund assets, fully 32% of gross 
estates consisted of ``business assets'' such as stock in closely held 
businesses, interests in non-corporate businesses and farms, and 
interests in limited partnerships. In larger estates this portion rose 
to 55%.
  Clearly, a substantial portion of taxable estates consists of family 
businesses.
  The recent tax bill increased the estate tax exemption from $600,000 
to $1 million. However, this is done very gradually and does not reach 
the $1 million level until 2006. The bill also increased the exemption 
amount for a qualified family owned business to $1.3 million. While 
both actions are a good first step, they barely compensate for the 
effects of inflation. The $600,000 exemption level was last set in 
1987, just to keep pace with inflation the exemption should have risen 
to $850,000 by 1997.
  Incremental improvements help, but we need more substantial reform. 
It is time to eliminate this tax entirely. This action has been taken 
in countries such as Australia and Canada. Unfortunately, the United 
States retains what are arguably the highest estate taxes in the world.
  Among industrial nations, only Japan has a higher rate than the U.S. 
But Japan's 70% top rate applies only to inheritance of $16 million or 
more. The U.S. top rate of 55% kicks in on estates of $3 million or 
more. France, the United Kingdom, and Ireland all have top rates of 
40%, and the average top rate of OECD countries is only 29%.
  Repeal of the estate tax would benefit the economy. George Mason 
University Professor Richard Wagner estimates that within seven years 
of elimination of the estate tax the output of the country would be 
increased by $79 billion per year, resulting in up to 228,000 new jobs. 
Under the current system, the energy that could go into greater 
productivity is expended by selling off businesses, dividing resources 
and preparing for the absorption of an estate by the government. Those 
businesses that survive the estate tax often do so by purchasing 
expensive insurance. A 1995 Gallup survey of family firms found that 
23% of the owners of companies valued at over $10 million pay $50,000 
or more per year in insurance premiums on policies designed to help 
them pay the eventual tax bill.
  The same survey found that family firms estimated they had spent on 
average over $33,000 on lawyers, accountants and financial planners in 
order to prepare for the estate tax.
  Ironically, the estate tax is often justified on the grounds that it 
helps to equalize wealth. But this effect is greatly exaggerated. A 
1995 study published by the Rand Corporation found that for the very 
wealthiest Americans, only 7.5% of their wealth is attributable to 
inheritance--the other 92.5% is from earnings.
  Mr. President, it is time to repeal this outdated tax. We must insist 
that no more American families lose their business because of the 
estate tax. We must ensure that when a family is coping with all the 
inevitable costs of passing a business from one generation to the next, 
the Federal Government is not there as an added burden.
  Mr. President, it is my hope that by introducing this tax legislation 
and placing these proposals on the table we can begin to debate 
significant tax relief for 1998.

[[Page S733]]

  Each of these changes: a lower capital gains rate, indexing, and 
repeal of the estate tax, are consistent with long-term tax reform. And 
each of them can be enacted this year.
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 1636. A bill to provide benefits to domestic partners of Federal 
employees; to the Committee on Finance.


     the domestic partnership benefits and obligations act of 1998

  Mr. WELLSTONE. Mr. President, last October, Congressman Barney Frank 
broke new ground when he introduced HR2761, the Domestic Partnership 
Benefits and Obligations Act of 1997. I am here today to break ground 
in the Senate by introducing the Domestic Partnership Benefits and 
Obligations Act of 1998. This bill does not introduce new benefits; it 
simply extends existing benefits to a previously uncovered group of 
employees for very little cost.

  Mr. President, let me take a moment to outline my bill. This bill 
provides benefits for same-sex domestic partners of civilian, federal 
employees. Partners must be living together, in a committed, intimate 
relationship, and responsible for each other's welfare and financial 
obligations. It provides access to five categories of benefits in the 
same way that married spouses have access: participation in retirement 
programs, life insurance, health insurance, compensation for work 
injuries, and upon the death of a government employee, the domestic 
partner would be deemed a spouse for the purpose of receiving benefits.
  This is a bill about justice, about fairness, about equity in the 
workplace. This bill is about saying to our gay and lesbian employees, 
``We value your contribution to the workplace, and to show you we value 
you, we're going to protect your families, like we protect the families 
of married employees, by providing them with benefits.'' It is about 
providing the opportunity for same-sex domestic partners to provide 
their partners--who previously have been denied--access to such 
benefits as health insurance.
  For many people in this country, insurance benefits for their loved 
ones are automatic, they are expected, they are the norm. But benefits 
didn't start out that way. In fact, they are a relatively modern 
invention. Benefits in the form of compensation were created in the 
1940's, essentially to increase compensation for some employees who 
were prohibited by law from getting pay increases. So instead of more 
pay, employers paid for certain products and services such as health 
insurance to take care of their employees and to make their businesses 
more attractive to potential employees. For gay men and lesbians, most 
of these benefits are completely inaccessible.
  But where is it written in stone that only married spouses and their 
children deserve benefits? Yes, many employers have chosen to limit 
benefits to married spouses and their children, but more and more, 
governments, universities, and private businesses have been making a 
different choice. Business and organizations like the San Francisco 
49ers, Reader's Digest, Starbucks, Coors, Ben and Jerry's, Kodak, 
Disney, the Union Theological Seminary, the Episcopal Diocese of 
Newark, the International Brotherhood of Electrical Workers #18, 
Mattel, the Vermont Girl Scout Council, and more than 50 Fortune 500 
companies have made the right choice to offer domestic partnership 
benefits. A more fair and equitable choice. A more humane choice.
  I am disappointed that domestic partnership benefits have already 
been offered in some cities and by some businesses since 1982 but here 
we are in 1998 and we're just now talking about them here in the 
Senate. Today there are at least 42 cities and municipalities, 12 
counties, 1 state, and 342 private sector for-profit and not-for profit 
businesses and unions which offer domestic partner benefits. The good 
news, though, is that we have more than 15 years worth of employers' 
experiences with providing these benefits.
  By virtue of our vote on DOMA, we have said that same-sex couples 
cannot marry. But that doesn't mean that people in long-term, loving, 
and committed relationships don't deserve to have the opportunity to 
provide their loved ones with health insurance, survivor benefits, and 
other benefits. Domestic partnership legislation levels the playing 
field for same-sex partners who are not allowed to marry. This bill is 
aimed at correcting that inequity. Here is the story of how not having 
domestic partnership benefits effected one couple's lives:

       Anonymous: My partner and I have been together for almost 
     six. About a year ago, he had to leave work due to a serious 
     heart condition. Since my employer doesn't include domestic 
     partnership benefits, we had to pay all of his expenses out 
     of pocket. For quite some time I had to support him from my 
     salary, or else he would have ended up on welfare. We are 
     still scrimping and saving to try and pay off the health care 
     expenses that should have been covered by my insurance (if we 
     had dp benefits). Almost all of my heterosexual friends have 
     been ``married'' less time than my partner and I and received 
     benefits immediately after the marriage. Their relationships 
     seem no more permanent than my own. When my partner and I 
     have been together for fifty years, we will still not have 
     insurance for him through my employer.

  Not only are domestic partnership benefits fair and just, they cost 
very little. Employers have found that upon implementing domestic 
partnership benefits, one percent of all employees--at most--actually 
sign up their same-sex partners for benefits. And more often, it is 
less than one percent. Even taking the most liberal figures, there is 
no legitimate reason to argue that more than 1% of our almost 300,000 
federal civilian employees will enroll. And even though this is a 
relatively small number of employees--at most 30,000--let me tell you, 
these benefits are of critical importance to those who do.

  For example, Marieta Louise Luna is a graduate student studying in 
the Divinity School at Duke University. She says,

       I just returned home from the hospital on Thursday night 
     from having a knee replacement made possible largely because 
     of the fact that Kathryn is a Duke employee and I have 
     domestic partner benefits.
       Guaranteed, I could not have had the surgery if I had not 
     had domestic partner benefits. For me, it was the literal 
     difference between walking and being handicapped for the next 
     several years.

  And at a cost of less than 1% of the total benefits budget--or less--
it is truly worth making this investment.
  Some might be afraid that domestic partnership policies could open 
the door to fraud with people signing up their friends in order to get 
health insurance.
  Most employers never ask for verification of a heterosexual marriage. 
I have never been asked to provide a marriage certificate to prove I'm 
married, and I doubt that many of you have either.
  But my bill has stringent requirements for qualifying as domestic 
partners. Among other requirements, partners must sign an affidavit 
certifying that they share responsibility for a significant measure of 
each other's common welfare and financial obligations. And they must 
show documentation to prove it--such as copies of a mortgage or lease 
with both names on it, copies of bank statements showing joint checking 
or savings accounts, copies of durable powers of attorney for property 
and health, or copies of wills specifying each other as the major 
recipients of each other's financial assets.
  In addition, my bill specifies serious consequences for fraud, 
including the possibility of disciplinary action, termination of 
employment, and repayment of any insurance benefits received.
  Finally, there are criminal statutes that provide that making false 
statements and defrauding the government are crimes which can result in 
a fine and/or imprisonment up to 5 years.
  The bottom line is that this bill creates serious consequences for 
fraud, establishes that every effort will be made to minimize fraud by 
those falsely claiming to be domestic and specifies that those caught 
will be seriously punished.
  Let me tell you one more story:

       Anonymous from Minnesota: I have had the same health care 
     benefits package for nearly 16 years. I began family coverage 
     when I married in 1978. Our two children were added when they 
     were born. My ex-husband remained on my insurance policy 
     after we divorced--at no additional cost--even though we were 
     not legally married.
       I am now in a committed lesbian relationship. My partner 
     had been teaching part-time in a private school for two years 
     before she became eligible for health insurance through her 
     employer. Two weeks before her insurance was to take effect 
     she was stricken with severe abdominal pain. Though we 
     considered ``toughing it out'' until her insurance kicked in, 
     it became increasingly clear that

[[Page S734]]

     she needed to be treated immediately. She had a large, 
     twisted ovarian tumor removed. By the time of the surgery, 
     her insurance was in place. We breathed a sigh of relief.
       Months later we learned that because her pain started (and 
     was briefly treated) before her insurance began, the claim 
     for coverage for the surgery and hospital stay were 
     disallowed because there was a pre-existing condition 
     exclusion in her insurance policy. We are now faced with over 
     $5,500 (plus 12% interest per year) in medical bills. This 
     may not seem like a lot of money to some people, but it 
     certainly is to us. And it's money that wouldn't have had to 
     be spent at all if she had been on my family coverage all 
     along.
       So why is it that my ex-husband (no legal relation) was 
     entitled to continue receiving benefits until he married, but 
     my life partner has had to go without medical insurance? The 
     answer is simple--discrimination.

  This is a bill about fairness. This is about equity in the workplace. 
This is about protecting employees' loved ones. It's the right thing to 
do.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Additional Stories Regarding Domestic Partnership Benefits

       Wendy I. Horowitz: My partner was ill for almost a year. I 
     worked for a large conservative company that never considered 
     implementing domestic partner benefits. After seeing one of 
     my co-workers get married and have instant coverage for her 
     husband (after they had been married for a day), I decided to 
     apply for benefits for my partner. They were denied. Her 
     illnesses were related to her tonsils, and the doctors 
     suggested that she have them removed. I had to come up with 
     the money to pay for this surgery (over $4,000 by the end of 
     it all), which put a great financial burden on us and on our 
     relationship.
       Jim and Hal: As an employee of the State of Maryland 
     (through my graduate assistantship), I receive comprehensive 
     health benefits. Although I could share my benefits with a 
     married spouse, I am not able to do a thing for my partner 
     Hal. Hal is another ``starving student''; he is in a doctoral 
     program at American University. Unfortunately, American does 
     not offer full health coverage to its graduate assistants, so 
     Hal is having to make do with emergency health coverage. This 
     has adversely affected us in two ways. First, we have to 
     cover Hals' regular health maintenance (e.g., dental 
     checkups) which is a strain on our already stretched budget. 
     Second and more importantly, Hal has a heart problem for 
     which regular appointments with a cardiologist are 
     recommended. We are not in a position to pay specialist fees 
     out-of-pocket; thus, we are unhappily have to settle for 
     doctors at American University's health center.
       U Minnesota: R and S are their late 30's, and they have 
     been in a committed relationship for 20 years. S is self-
     employed as a psychotherapist and is registered with the 
     University as R's domestic partner.
       Four years ago, R gave birth to the couple's first child L. 
     R was able to put L on her health insurance policy as a 
     dependent. The couple incurred no additional cost or 
     additional deductibles for L's birth or subsequent medical 
     treatment.
       Three years later, S gave birth to the couple's second 
     child M. Because the University only recognizes formal 
     adoption (not guardianship) for direct dependent coverage, M 
     is only listed as S's child and not R's child. Since the 
     University's domestic partnership plan only provides medical 
     premium reimbursement for partners and their dependents, R 
     and S incurred significantly higher costs for M's birth than 
     for L's birth.
       Specifically, the couple pays out $526 every 3 months for S 
     and M's insurance policies which each have a $500 deductible 
     (the University plan has no deductible and low copays for 
     dependent care). Reimbursement from the University for this 
     cost takes additional 3 months after the couple pays. Due to 
     IRS regulations, which do not recognize the partners as a 
     couple, the University's reimbursement to the employee is 
     taxed. The end result of all the complications of this system 
     for the couple is that they have $1,500 in outstanding debt 
     for unreimbursed health premiums. In addition, they were 
     charged $1,000 in deductibles plus higher copays for M's 
     birth. They have had to take out a loan to cover these 
     health care related expenses.
       Becky Liddle: I am a tenured associate professor. My 
     domestic partner quit her job and moved here to Alabama in 
     June of '97, as the ``trailing spouse'' in a dual career 
     couple. We thought she would find work very quickly. But due 
     in part to sexual orientation discrimination in hiring, she 
     has been unable to find professional work and health 
     benefits. She is working full-time for Kelly Services, which 
     does not include health benefits. We brought her a 4-month 
     hospitalization policy before she quit her job, assuming that 
     would be more than enough time--it wasn't. She has no health 
     insurance. We have looked at policies she could buy herself, 
     but they are extremely expensive, and cover very little. My 
     university will not allow me to put my domestic partner on 
     our insurance (in fact, Blue Cross of Alabama explicitly 
     states in its policy that ``spouse'' is limited to someone of 
     the opposite sex). Consequently, every time she gets sick it 
     is a crisis, and we make potentially life-threatening choices 
     about whether she should go to the doctor. For example, she 
     got pneumonia a few weeks ago. This is, she had all the 
     symptoms of pneumonia, according to our Time/Life ``medical 
     advisor--complete guide to alternative & conventional 
     treatments'' book, which has become her primary care 
     ``physician''. The book said if it was viral she should just 
     go to bed, but if it was bacterial it could be life 
     threatening. It appeared from her symptoms to be viral, so we 
     did not spend the money to go to a doctor. This time we were 
     right. She recovered fine in about a week. Of course, if we'd 
     been wrong, she could be dead. I think we make good decisions 
     about how to spend our limited health-care dollars. But I 
     ought to be able to put her on my insurance.
       Eva Young: I live with my partner of 10 years in 
     Minneapolis. I have benefits through my work place. Even 
     though the University of Minnesota offers ``domestic 
     partnership'' benefits, these don't work for us. To be able 
     to get pretax benefits (analogous to what a married couple 
     get), we would have to declare my partner a dependant. This 
     is degrading to my partner. Although I currently have a 
     better job than she does (it pays better and is permanent), 
     it doesn't mean we should have to declare her a dependant 
     (with all the negative connotations that has) in order to get 
     the benefits we are both entitled to. To add insult to 
     injury, I am taxed at the single rate, even though I am 
     primary breadwinner for a family of 4. I consider this an 
     equal pay for equal work issue. Why should I get paid less 
     than my married coworker, just because I am not legally 
     married?
       Not having the same benefits that a heterosexual married 
     couple keeps my family in poverty. My family would not be in 
     poverty if we had the same rights as married couples do. It's 
     that simple. This isn't something that is just for the gay 
     couple--it also will affect a lot of children. Actually, 
     domestic partnership will do little for the dual career gay 
     couple, where both individual are in good jobs--it's going to 
     make a difference for gay couples who have families, or have 
     one partner who is uninsured. Allowing gay couples to insure 
     their partner and partner's children through their workplace 
     insurance could also help some individuals get off 
     government assistance.
       Kirk A. Nass: My domestic partner and I have been together 
     nearly 14 years. My partner, Michael E. Gillespie, was an 
     attorney in Seattle when we met, now he is self-employed and 
     runs a business in Oakland which provides physicians as 
     expert witnesses to lawyers and insurance companies for 
     plaintiff work. Michael's past employers never provided good 
     medical coverage, if they provided it at all. In 1989 I 
     finished graduate school and started a job with Chevron. 
     Michael quit his job to move with me to the San Francisco Bay 
     Area. Chevron provides excellent health coverage to its 
     employees, but I was unable to cover him because domestic 
     partners were not eligible for coverage at the time. The 
     prospect of him having a major medical event and us not being 
     able to pay for it bothered me for years.
       After starting his own business five years ago, he joined 
     an HMO (Kaiser Permanente, No. Calif.) under an individual 
     plan. In 1995 he was diagnosed with Type II diabetes; in 1996 
     he suffered a heart attack and underwent an angioplasty to 
     open the blocked artery. Because of his HMO coverage, all of 
     his diabetes care, his stay in intensive care, and the 
     angioplasty were covered. He's now in excellent health. If 
     his business failed--even if he still worked for some of his 
     past employers--we would not have had the financial resources 
     to pay for his cardiac care.
       On Jan. 1, 1998, Chevron began extending medical and dental 
     coverage (and some other benefits) to the same and opposite 
     sex domestic partners of employees and the partners' eligible 
     children. The coverage Chevron provides for Michael through 
     Kaiser is even better than what he was paying for himself at 
     Kaiser. It's the first time since we've been together he's 
     had full coverage and the first time I haven't had to worry.
       Having domestic partners benefits such as medical coverage 
     is important to us because it makes me sure that the most 
     important person in my life can be taken care of when he 
     needs to be. The experiences we've gone through together, 
     although they've led to successful conclusions, have shown 
     too often that ``what-if'' scenarios can be all too real.
       Dan Ross: My partner of 5 years has cerebral palsy (a 
     congenital condition; in his case, it creates overly-tight 
     muscle tone). After orthopedic surgery to correct some 
     aspects of his gait, he had to make significant changes to 
     his walk, and work on daily stretches, most of which require 
     assistance. He is (and was) able to walk on his own, although 
     now does so with a cane. He travels quite a bit for his job 
     and works long hours, so it is difficult for us to work on 
     this on a regular schedule. He can't take a leave of absence 
     form his job, or even temporarily resign, to work on physical 
     therapy full-time, because he absolutely needs his health 
     insurance and he is afraid of jeopardizing that. (Some 
     insurance plans even make cerebral palsy a ``pre-existing 
     condition''.) My health insurance won't cover him, of course, 
     and until recently, I wouldn't have been able to take sick 
     leave to stay with him in the hospital and at home. He was 
     bedridden for a total of two weeks after the surgery. As it 
     was, I hurried back and forth between work and home, because 
     I had just begun a new job, and didn't want to make a bad 
     impression there; but he had scheduled the surgery for around 
     Christmas, so there were many

[[Page S735]]

     people off on vacation time during that period. The issue 
     of domestic partnership benefits--whether equity in 
     providing health insurance, or even just uniform treatment 
     in granting sick/caregiving and bereavement leave--is 
     important to us as a result.
       Pam Herman-Milmoe: I am a federal employee and Sara has 
     just finished her Masters Degree in Clinical Psychology. 
     While she was in school she had access to limited benefits, 
     but now that she is job hunting she is completely uninsured. 
     She is working in a paid internship position that is 
     providing great experience and a real service to the 
     community, but no benefits. As she moves on in her career she 
     would like to establish her own practice, but if she does 
     she'll have to pay for her own benefits without any support. 
     The practice of denying benefits to domestic partners puts us 
     at a severe economic disadvantage compared with my coworkers. 
     They can use the money their spouses save on benefits for 
     investments and other purposes. Sara and I plan on having 
     children, who will be covered by my benefits, but money that 
     would support their education and upbringing will have to go 
     to pay for benefits for Sara.
       Steve Crutchfield: A year ago, my partner of 22 years was 
     fired from his job. When he lost his job, he lost his health 
     insurance benefits. He was able to maintain benefit through a 
     COBRA plan, but it cost us an additional $150 per month to 
     maintain his health benefits. Now that his COBRA benefits are 
     expiring, he has to buy individual medical insurance at a 
     cost of over $300 month.
       If we had a domestic partner benefits law in place, I could 
     have put him under my insurance benefits as the spouse of a 
     Federal Government Worker. However, since our relationship is 
     not recognized as a marriage, I am unable to enjoy the 
     medical insurance benefits accorded to my colleagues who are 
     in traditional marriages.
       David Perkins: My partner of fifteen years came with me to 
     Champaign-Urbana, Illinois in order that I might take a job. 
     We have been here over three years and he has not been able 
     to find anything other than part-time work that offers no 
     benefits. Because the state or the University does not extend 
     benefits to same-sex partners, he is without any health 
     benefits whatsoever--and as he will soon turn forty-five 
     years old, health insurance is too expensive for us to pay 
     out-of-pocket. If anything, should happen to him--it will 
     either completely wipe me out financially, or he will be 
     thrown on the mercy of the taxpayers as an indigent case. Not 
     a dramatic story, true--but a fear we live with daily.
       Anonymous: My partner and I have 3 children ages 15, 13 and 
     3. I gave birth to the first 2 before getting together with 
     her. The youngest one we had together. Shortly after the 
     arrival of our youngest, the opportunity arrived that I could 
     stay home and care for her instead of putting her in day 
     care. But in quitting my job I also had to give up my health 
     care benefits. My partner's company does not offer domestic 
     benefits so I am not covered for my asthma medication that 
     I need to breath. I also am a high risk for breast cancer 
     due to family history (mother, grandmother and 3 sisters) 
     but I agreed to stay home for the benefit of all our 
     children.
       Anon: My (same-sex) partner moved in with me in 
     Pennsylvania two years ago. She had been self-employed (a 
     clinical psychologist with a private practice) in CO. We are/
     have been in a long-term committed relationship for three 
     years. She had been paying her own health insurance, but 
     since she gave up her income to move here, she had no way of 
     continuing to pay it. My employer (a college) has a 
     subsidized health insurance benefit for married couples only; 
     if we had been married, the additional coverage would have 
     cost $60. Instead, I had to pay $175 monthly so that she 
     would have less adequate health insurance than I have. Since 
     she needed surgery within months of moving here, with a long 
     recovery period, she also could not earn money to help with 
     expenses. We had to spend money on a lawyer to get documents 
     assuring the hospital that I (an ``unrelated'' person) could 
     make decisions for her were she to be incapacitated, etc. 
     Furthermore, she could not avail herself of the physical 
     recreational facilities at the college since she was not a 
     bona fide spouse. I had to pay a membership fee for her to 
     join a ``Y'' so she could use the physical exercise equipment 
     she needed to recover from her surgery. All in all, not 
     having our partnership recognized has cost me a bundle.
       Mindy Kurzer: My partner Linda and I have been in a 
     committed relationship for 7 years and have a 2 year old 
     daughter named Della. I was very pleased when the University 
     of Minnesota instituted a domestic partner policy about 3 
     years ago. This policy has helped our family, because Linda 
     is self-employed and previously carried only catastrophic 
     coverage with lots of exclusions for pre-existing conditions. 
     Since the U of M started this policy, we have been able to 
     purchase a very comprehensive medical policy for her. This 
     has turned out to be extremely important, because she was in 
     a car accident 2 years ago, and sustained serious injuries 
     for which she underwent two surgeries and still requires 
     medical treatment. With her current health insurance, we have 
     been able to get her excellent care--without it, I doubt we 
     would have been able to do so.
       Domestic partner benefits are important to our community, 
     but I think they are also important to the broader society. I 
     have had numerous opportunities to leave the University of 
     Minnesota and have chosen to stay here in part because the 
     University has shown a commitment to reducing discrimination. 
     As more and more businesses and Universities institute 
     domestic partner benefits, institutions that do not 
     (including the government) may be disadvantaged when it comes 
     to getting and retaining top-notch employees.
       Sibley Bacon: I work for Peoplesoft, Inc. who provides 
     domestic partner benefits to same sex couples. My partner, 
     and I have been together for 4 years * * * she is self-
     employed, so we opted to have her covered through Peoplesoft. 
     This year she developed a 5.5 cm dermoid tumor on one of her 
     ovaries which was causing her a great deal of pain on a 
     daily basis. Our health insurance paid for the surgery and 
     follow up visits. This would have cost us thousands of 
     dollars had we not had the coverage through Peoplesoft. 
     Additionally she's been able to see a physical therapist 
     to address some old gymnastics injuries. Needless to say, 
     I am eternally grateful that my company provides these 
     benefits to its gay and lesbian employees. Domestic 
     partner coverage will certainly be a deciding factor in 
     the future if I ever end up looking for a job outside of 
     Peoplesoft.
       Toni A.H. McNaron: My partner, and I have been in a 
     committed relationship for almost 20 years (our anniversary 
     is in June). We own a large home in south Mpls., pay lots of 
     property taxes, earn well over $100,000 a year, and are the 
     first people in our neighborhood to shovel our walks in 
     winter.
       One of our very nice heterosexual neighbors just married 
     his girlfriend and sometimes doesn't shovel until the next 
     day.
       The moment he and she signed the marriage license, she had 
     his full health coverage and retirement plan benefits from 
     his quite successful legal coverage and retirement plan 
     benefits from his quite successful legal practice. My partner 
     has never had a PENNY of coverage during the 34 years I've 
     worked as a professor at the University of Minnesota. And, 
     even more unfair, if I were killed by a drunk on the freeway 
     on the way home tonight, she would not even get a condolence 
     letter from the University. Instead she would get a check for 
     the ENTIRE amount of my retirement--considerable after 34 
     years. Furthermore, she would have to pay the federal 
     government approximately $90,000 at tax time because of her 
     ``windfall.'' (How amazing to consider it a windfall to have 
     your beloved partner of 20 years killed.)
       My neighbor's wife would get a condolence letter from his 
     firm explaining to her her options for collecting his 
     retirement funds. She is smart and would choose to have them 
     delayed until she is older and then to have them parceled out 
     over time so that she would pay next to no taxes on them.
       Nancy: I am in Texas on internship. Rose, my partner, is 
     back home in Minnesota. Rose has fibromyalgia/chronic fatigue 
     syndrome and a number of other health problems. She is in the 
     process of leaving her job and applying for disability. 
     Partly because of her health problems, we would like to 
     relocate permanently to Texas. However, it will take several 
     months for her disability claim to be processed so she can 
     get on Medicare. She can continue her insurance coverage 
     under COBRA, but that would only be good in Minnesota, since 
     her coverage is with a local HMO. I can't put her on my 
     insurance due to lack of domestic partner benefits. So we're 
     faced with a number of unattractive options: (1) I could look 
     for a job in Minnesota, even though both of us would rather 
     move south and that move would be good for Rose's health. (2) 
     She could move here and be without insurance coverage for her 
     multiple health problems until she is approved for 
     disability. (3) We could prolong our geographic separation 
     and have the expense of maintaining separate households 
     until she gets on disability, which can be a very long 
     process. I think this is typical of the difficult choices 
     gay and lesbian couples are forced to make without 
     domestic partner benefits.
       Julie Ford: My name is Julie Ford, I am the Director of 
     News and Public Affairs for a television station in Sarasota, 
     Florida. My partner is Vicky Oslance, who is a surgical 
     technician by trade but who has chosen to work per diem 
     instead of full time in order to maintain our household since 
     my full time job is very demanding and time consuming. 
     Working per diem, she of course has given up health benefits. 
     This is an added expense for us, one that the other married 
     department heads at my workplace do not have to deal with. I 
     an my partner have been together nearly 9 years . . . longer 
     than most of the married people I work with. We maintain a 
     joint checking account, stock portfolio, and own property 
     together. It is totally unfair for me to have to pay an 
     outrageous amount to insure Vicky's health when other married 
     people at my workplace can get inexpensive company health 
     insurance for their spouses.
       Susan Hagstrom. When I was hired by UC Berkeley five year 
     ago, I was struck by the lack of equal compensation for equal 
     work. What I did not know then was how close to home this 
     inequality would hit.
       I recall vividly the day Debra, my partner of seven years, 
     suffered an excruciating ruptured disk. I cried as I watched 
     her in so much pain that she could not stand, sit, or work 
     and had to literally crawl to the bathroom. I cried when she 
     refused to get an MRI because we couldn't afford the $1000 
     procedure or the expensive doctor visits. I cannot fully 
     describe to you how difficult this lack of benefits has been 
     for me and for Debra.

[[Page S736]]

       Lori Stone: Until recently, my partner had a job that 
     provided a much inferior benefit plan to my own. Because the 
     deductible on her plan was so high, she would often elect not 
     to get treated for illness, preferring just to ``ride it 
     out.'' Of course this was a risky way to go, and it back-
     fired on us, when she came down with kidney stones, and was 
     eventually hospitalized. The physical trauma plus the debts 
     we have incurred, because I was unable to cover my partner's 
     expenses, have been difficult to surmount.
       I currently work for an organization that has excellent 
     medical benefits but no provision for me to be able to cover 
     my partner's medical expenses. If I had been able to cover my 
     partner under my plan, I believe we wouldn't be in the 
     unfortunate financial situation that we are today.
       Thanks so much for taking this bold move. I pray for the 
     day when I won't feel so disenfranchised in my own country.


            DOMESTIC PARTNER BENEFITS--VIGNETTES--CLV/GLCAC

                              [First case]

       Bill and his partner Joseph have been living together in a 
     committed relationship for 8 years. Bill worked as an 
     attorney for a large Minneapolis firm for 12 years before he 
     was diagnosed with MS and had to leave his job within a year 
     from diagnosis. Joseph works as a maintenance engineer for 
     the State of Minnesota. Bill's income was two times Joseph's 
     current income when he was able to work. The benefits Bill 
     received on the firm's short term disability plan have 
     expired, and no long term disability plan was in place. Bill 
     requires 24 hour care, but is not yet eligible for inpatient 
     nursing care.
       Bill's doctor visits and medications are covered by Medical 
     Assistance. Medical Assistance will not, however, pay for the 
     cost of Bill's in-home care attendants. Bill's doctors have 
     recommended 24 hour care. Joseph must continue to work to pay 
     household expenses. The loss of Bill's income and medical and 
     care expenses have forced the men to sell their home and trim 
     many other expenses. The insurance plan offered by Joseph's 
     employer would cover the cost of in-home care for the spouse 
     or dependent of the employee. The State of Minnesota does 
     not, however, offer health care benefits for unmarried 
     partners of its employees. At the rate Joseph is spending 
     money to pay for Bill's care, it is likely that he will have 
     to leave his job at the State, collect public assistance and 
     care for Bill himself.

                             [Second case]

       Debra and Sara have been living together in a committed 
     relationship for five years. They own a home together and 
     have made other major purchases together. Debra and Sara had 
     a child (Michael) 2 years ago. Sara gave birth to the child. 
     Debra's employer offers health and life insurance benefits to 
     domestic partners, and children of domestic partners are 
     considered dependents of the employee for purposes of 
     insurance coverage. Sara is self employed. Michael, Sara and 
     Debra are all covered by insurance as a family through 
     Debra's employer's plan. Six months ago Debra was recruited 
     by a competing business because of her unique skill and 
     experience, and was offered a job. The job would be a step up 
     for Debra in the advancement of her career. The pay is about 
     the same, but the prospective employer does not offer health 
     and life benefits to unmarried partners and would not cover 
     Michael as a dependent of Debra's. For these reasons, Debra 
     decides to decline the offer of employment and delays career 
     advancement as a result. The competing business misses out on 
     Debra's unique skill and experience.

                              [Third case]

       Joe is a student at a private college. His partner Jim 
     works for a mid-size accounting firm. Jim's employer does not 
     offer benefits to unmarried partners/dependents of its 
     employees. Jim and Joe can't afford to pay the $160.00 per 
     month for Joe's health insurance, and since Joe is only 38 
     years old, they hope the risk of health problems is low, and 
     decide that he will have to go without coverage. Within a 
     year, Joe is diagnosed with Crohn's disease and requires 
     surgery, treatment and ongoing medications that are very 
     expensive. Joe quits school under the financial pressure to 
     look for a job that offers health benefits. Joe gets a job 
     quickly and applies for health coverage, but the insurer will 
     not cover any costs associated with Joe's pre-existing 
     condition of Crohn's disease.


              personal statements--university of minnesota

       Selected personal statements of gay and lesbian University 
     employees on the impact of not having equal benefits.
       1. The University should honor its nondiscrimination policy 
     statement by eliminating all polices that discriminate on the 
     basis of sexual orientation. The University should recognize 
     domestic partnership couples as they do married couples. I 
     simply want for my family what a married employee can count 
     on for his/her family. If, as an employee they receive a 
     benefit, so should I. The solution is to provide similar 
     benefits to domestic partnership couples or remove the 
     benefits from married couples. As employees of the University 
     we should have the same treatment. Gays and lesbians employed 
     by the University have been systematically excluded from 
     benefits that have been provided to their heterosexual 
     colleagues with whom they work side by side, sometimes 
     performing exactly the same work. That is very wrong and 
     needs to be corrected!
       On a personal level, for the 25 years I have been employed 
     at the University I have been denied the full employment 
     status and benefits provided to my heterosexual colleagues. 
     This has cost me dearly financially, and has sent me the 
     message that who I love is not valued. This treatment tells 
     me that my family concerns are not important to the 
     University. Although I am also an employee of the University 
     I am not provided with the same health care security for my 
     family as are my married colleagues.
       Finally, as I approach retirement, I am outraged to find 
     out that my partner can not defer taxes upon receiving my 
     retirement money in the case of my death as a married spouse 
     is able to do. This amounts to a huge financial loss for my 
     partner and other gay and lesbian employees and their 
     partners. Imagine your spouse having to pay 28% of $250,000 
     ($70,000) or 31% of $300,000 ($93,000) right off the top, 
     thus diminishing the amount received by our partners to 
     $180,000 and $207,000 respectfully. This is a concrete 
     example for two of us currently long time employees of the 
     University and who are also in long term domestic partnership 
     relationships. In addition, both couples have registered 
     under the city of Minneapolis domestic partner ordinance.
       I am angry, disappointed and frustrated that the Board of 
     Regents, President Hasselmo and the administrative leadership 
     of the University have not taken action to enforce the 
     University's nondiscrimination policy. The University should 
     be playing a leadership role in righting this wrong, first, 
     for its employees and then in initiating changes for the 
     state of Minnesota and in urging Federal tax law changes.
       2. When my partner's mother unexpectedly committed suicide 
     five years ago, I was scheduled to leave that morning for an 
     out-of-state business trip. I'll never forget my struggle 
     over how I would approach my supervisor to request permission 
     to either cancel the trip or to send someone in my place. I 
     was up for a promotion and I was afraid that to acknowledge 
     my sexual preference to this person, who I knew held 
     fundamental religious values, would compromise my work and my 
     livelihood.
       I ultimately equivocated and asked if I could send someone 
     else on the trip, because my ``housemate--slash(/)--best 
     friend needed my support. As you might guess, this didn't 
     sound sufficiently persuasive and I left on the trip 
     (shortened by two days) with the ``blessing'' of my partner, 
     who, of course, was in shock. I succumbed to fear and in 
     doing so compromised my own humanity and my bond with my 
     partner. It is still deeply painful for me to remember the 
     coerciveness of the situation, the fear and intimidation that 
     I experienced, and my own personal failing.
       It was one of the most demeaning and dehumanizing 
     experiences of my life. I ask those of you who are married to 
     imagine having to make such a choice: imagine having to ask 
     permission to be with your grieving partner. There are no 
     reparations the University can offer me to recast the past. I 
     would, however, like to think that the Board of Regents and 
     central administrators have the compassion and courage to act 
     now so that others will not be confronted with such a choice.
       3. The University is discriminating on the basis of sexual 
     orientation. My family doesn't receive the same benefits as 
     families of heterosexuals.
       I have had the Group Health Plan benefits package for 
     nearly sixteen years. I began family coverage when I married 
     (1978), adding my spouse at a nominal monthly fee to the 
     single coverage I already carried (which was paid in full by 
     the University). When my children were born (1983, 1986) the 
     cost of family coverage didn't change. In fact, the cost of 
     family coverage is constant no matter how many dependents you 
     have on the policy. I was amazed to learn that the cost of 
     family coverage (including coverage for my ex-husband) 
     remained the same even after getting a divorce. My ex-husband 
     remained on my insurance policy--at no additional cost--even 
     though we were not legally married.
       I am now in a committed lesbian relationship. My partner 
     and I have a relationship every bit as stable and committed 
     as a marriage, but we are not entitled to the same benefits I 
     enjoyed when I was married.
       My partner had been teaching part-time in a private school 
     for two years before she became eligible for health insurance 
     through her employer. Two weeks before her insurance was to 
     take effect she was stricken with severe abdominal pain. 
     Though we considered ``toughing it out until her insurance 
     kicked in, it became increasingly clear that she needed to be 
     treated immediately. She had a large, twisted ovarian tumor 
     removed in October, 1990. By the time of the surgery, her 
     insurance was in place. We breathed a sigh of relief.
       Months later we learned that because her pain started (and 
     was briefly treated) before her insurance began, the claim 
     for coverage for the surgery and hospital stay were 
     disallowed because there was a pre-existing condition 
     exclusion in her insurance policy. We are now faced with over 
     $5,000 (plus 12% interest per year) in medical bills. That 
     may not seem like a lot of money to some people, but it 
     certainly is to us. And it's money that wouldn't have had to 
     be spent at all if she had been on my family coverage all 
     along.
       So why is it that my ex-husband (no legal relation) was 
     entitled to continue receiving benefits until he married, but 
     my life partner has had to go without medical insurance? The 
     answer is simple--discrimination.
       4. One of my colleagues, a male who is heterosexual, 
     received his Ph.D. the same year I

[[Page S737]]

     did. We have taught the same number of years and were tenured 
     here the same year. However, he has received health benefits 
     for his wife and two children during this time. I believe 
     that would add up to several thousand dollars more that he 
     has received from this University than I have. My partner is 
     self employed part time and works at the University only to 
     receive benefits. I feel that I am discriminated against 
     based on my sexual preference and have suffered significant 
     financial loss by having to pay for health benefits for my 
     partner and our child.
       5. I feel discredited in all but the most professional 
     senses since my University will not acknowledge the 
     centrality of my relationship with my partner of 14 plus 
     years. This level of constant and costly discrimination makes 
     any positive responses to me from the institution bittersweet 
     at best and hypocritical at worst. My family life is erased 
     and made invisible by an institution of learning which tauts 
     acceptance of diversity and pursuit of truth. When I'm not 
     furious, I'm terribly sad.
       6. It is very demoralizing to see the incredible benefits 
     that my married colleagues (heterosexual) get and know that 
     it will be a fight to get the same. My partner is self-
     employed and health coverage is astronomical for self-
     employed people. In order to buy a plan similar to that at 
     the U, it would cost us $5-$7000 a year. Since it's so 
     costly, my partner does not have very good health coverage 
     and as a result I am very concerned about what would happen 
     if a serious health crisis occurs.
       So I am not just losing the $1500 or so the U would pay out 
     to cover her because of the lack of recognition, I will have 
     to pay $5-$7000 per year more than most of my colleagues. I 
     view this as if I received that much less salary per year. 
     How can the U have sexual orientation, gender and marital 
     status in the equal opportunity statement and not consider 
     this discrimination?
       I wrote a letter to Gus Donhower when I heard of the 
     proposed changes in health coverage. One option proposed was 
     that those people covered by their spouses' employment could 
     get the cash equivalent of coverage instead of being covered 
     by the U. I suggested that if that were done, then those of 
     us without spouses or dependents should certainly get the 
     cash equivalent of spousal/dependent coverage. It seems an 
     obvious parallel to me. He responded by saying it was an 
     interesting idea but there's no money for this added benefit. 
     Well, I think that's like saying it would be nice to pay 
     blacks or women what we pay men, but we just don't have the 
     money. One has no choice but to find the money. If there 
     really isn't enough then some benefits may need to be removed 
     from those who have them, in order to provide for those who 
     don't. Maybe people with more than two children need to pay 
     for their health insurance, or perhaps the cost for an 
     employee for spousal coverage needs to increase. The current 
     discrimination is so clear to me (of course I'm not a lawyer) 
     that I wonder if a lawsuit could successfully challenge the 
     University's non-compliance with its equal opportunity 
     statement.
       At this point, my commitment, dedication, willingness to 
     work hard under increasingly difficult pressure, is affected 
     by my feeling of not being seen, recognized, and treated 
     equally to my heterosexual colleagues. Right now, it's hard 
     not to feel taken advantage
     of . . . .
       7. My partner returned to school to pursue a second 
     advanced degree. She attends the University of Minnesota. At 
     the same time, one of my married colleagues' spouse returned 
     to school. Their health insurance profile did not change at 
     all. Ours changed dramatically. Because I cannot get health 
     insurance for my partner of 10 years (longer than my married 
     colleague), we have paid 2,500 per year in health insurance 
     and routine health care out of pocket. Over three years, the 
     tax on being a lesbian has been $7,500. I realize of course, 
     that the cost of my health insurance would have increased 
     during this period, so the net cost to us would have been 
     above my current health insurance but below $7,500. This 
     economic burden is a clear example of otherwise similarly 
     situated people being treated differently solely on the basis 
     of sexual orientation.
       Let me add that I do not think that the University should 
     require public registration of partnerships to receive 
     partnership benefits unless the state revokes the so-called 
     ``sodomy'' law. To ask for such registration imposes the 
     acknowledgement of legal risk as a cost for benefits. In 
     addition, if reduced tuition is available for other family 
     members, this benefit should be extended to gay and lesbian 
     families as well.
       8. The University considers me ``single''. As a ``single'' 
     person, I subsidize both married couples and individuals with 
     children. But as a domestic partner I should be able to enjoy 
     the same benefits as other ``married'' couples.
       Last summer my partner required minor surgery for skin 
     cancer. Because she was a substitute teacher, she had no 
     coverage. As a result we became responsible for the bills. 
     This created more financial and emotional distress for us 
     which I am certain impacted my own productivity.
       Another issue I have is that it seems the administration 
     wants us to provide documentation (e.g. registration, 
     affidavits, etc.) to prove we are indeed a couple. Does the 
     University require married couples to provide an affidavit or 
     their marriage license when applying for benefits?
       Furthermore, the domestic partnership applications become 
     public records. Given the history of the discriminatory 
     treatment meted out on gays and lesbians in ours and other 
     cultures, I would not want to be that public in my sexual 
     orientation, especially in a state without a human rights 
     amendment protecting us.
       9. How do I feel about the University's treatment of 
     domestic partners? Not positive! My partner and I each have 
     one dependent. We must each pay for family benefits which is 
     a huge commitment, especially since my partner is self-
     employed and self-insured. Many of us are on federal 
     benefits. If the University changes its policy we'll need 
     help so that we can move to University benefits.
       10. I feel that if the University is unable to provide 
     health benefits to unmarried partners they should also refuse 
     benefits to married partners and only cover under age 
     dependents. I consider the lack of these benefits to be an 
     unequal and discriminatory pay scale, with married employees 
     receiving higher compensation levels just because they are 
     married.
                                 ______
                                 
      By Mr. TORRICELLI (for himself and Mr. Kohl):
  S. 1637. A bill to expedite State review of criminal records of 
applicants for bail enforcement officer employment, and for other 
purposes; to the Committee on the Judiciary.


   the bounty hunter accountability and quality assurance act of 1998

  Mr. TORRICELLI. Mr. President, today I am joined by my distinguished 
colleague from Wisconsin, Senator Kohl, in introducing the ``Bounty 
Hunter Accountability and Quality Assurance Act of 1998.'' Our bill 
will begin the process of reforming the revered but antiquated system 
of bail enforcement in this country.

  Throughout our nation's proud history, bounty hunters have proved a 
valuable addition to our law enforcement and recovery efforts. About 40 
percent of all criminal defendants are released on bail each year, and 
in 1996 alone more than 33,000 skipped town. Police departments, no 
matter how efficient or determined, cannot be expected to deal with so 
many bail jumpers in addition to their other duties. But while public 
law enforcement officers recover only about 10 percent of defendants 
who skip town, bounty hunters catch an incredible 88 percent of bail 
jumpers.
  Because of the special, contractual nature of the relationship 
between bail bondsmen and those who use them to get out of jail, bounty 
hunters have traditionally enjoyed special rights--a nineteenth century 
Supreme Court case affirmed that while bounty hunters may exercise many 
of the powers granted to police, they are not subject to many of the 
constitutional checks we place on those law enforcement officials. As a 
result, bounty hunters need not worry about Miranda rights, extradition 
proceedings, or search warrants.
  The ability to more efficiently track and recover criminal defendants 
serves a valuable purpose in our society. But the lack of 
constitutional checks on bounty hunters also opens the system up to the 
risk of abuse. Each of us has read or heard about cases in which 
legitimate bounty hunters or those simply posing as recovery agents 
have wrongfully entered a dwelling or captured the wrong person.
  In one recent Arizona case, several men claiming to be bounty hunters 
broke into a house, terrorized a family and ended up killing a young 
couple who tried to defend against the attack. It now appears that 
these men were simply ``posing'' as bounty hunters, but there are other 
reported incidents in which ``legitimate'' bounty hunters have broken 
down the wrong door, kidnaped the wrong person, or physically abused 
the targets of their searches. And there is little recourse for the 
innocent victims of wrongful acts.
  Our legislation would begin the process of making bounty hunters more 
accountable to the public they serve, and would help to restore 
confidence in the bail enforcement system. The bill would not unduly 
impose the will of the federal government on states, which have 
traditionally regulated bounty hunters. Our legislation contains only 
three simple provisions, each of which will make it easier to better 
regulate bounty hunters, but none of which will overburden states.
  The first provision of the ``Bounty Hunter Accountability and Quality 
Assurance Act'' would simply allow a national bail enforcement 
organization to run background checks through the

[[Page S738]]

FBI, ensuring that there will be a relatively easy way to keep 
convicted felons out of the bail enforcement business. A nearly 
identical provision related to private security guards recently passed 
the House by a nearly unanimous vote.
  The second provision of the bill directs the Attorney General of the 
United States to establish model guidelines for states to follow when 
creating their own bail enforcement regulations. In the course of her 
work, the Attorney General will be specifically directed to look into 
three areas identified by the bill--whether bounty hunters should be 
required to ``knock and announce'' before entering a dwelling, whether 
they should be required to carry liability insurance (most already do), 
and whether convicted felons should be allowed to obtain employment as 
bounty hunters. While states are not required to follow the model 
guidelines, those states who choose to adopt the guidelines within two 
years will receive priority for Byrne grant funding.
  Finally, this bill makes bail bond companies liable for the acts of 
the bounty hunters they hire. The clarification of liability in our 
bill will encourage these companies to carefully select and perhaps 
even train the bounty hunters in their employ. Perhaps we can cut down 
on the worst abuses if we force employers to take a closer look at who 
they hire.
  Mr. President, it is time to start the process of making rogue bounty 
hunters more accountable, while at the same time restoring America's 
confidence in the long tradition of bail enforcement that dates from 
the earliest days of this nation. I urge my colleagues to join us in 
taking this first step towards this process, and I thank my 
distinguished colleague from Wisconsin, Senator Kohl, for joining me in 
introducing this bill today.
  I ask unanimous consent that the full text of this bill be published 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1637

       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 ``Bounty Hunter Accountability 
     and Quality Assistance Act of 1998''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) bail enforcement officers, also known as bounty hunters 
     or recovery agents, provide law enforcement officers with 
     valuable assistance in recovering fugitives from justice;
       (2) regardless of the differences in their duties, skills, 
     and responsibilities, the public has had difficulty in 
     discerning the difference between law enforcement officers 
     and bail enforcement officers;
       (3) the American public demands the employment of 
     qualified, well-trained bail enforcement officers as an 
     adjunct, but not a replacement for, law enforcement officers; 
     and
       (4) in the course of their duties, bail enforcement 
     officers often move in and affect interstate commerce.

     SEC. 3. DEFINITIONS.

       In this Act--
       (1) the term ``bail enforcement employer'' means any person 
     that--
       (A) employs 1 or more bail enforcement officers; or
       (B) provides, as an independent contractor, for 
     consideration, the services of 1 or more bail enforcement 
     officers (which may include the services of that person);
       (2) the term ``bail enforcement officer''--
       (A) means any person employed to obtain the recovery of any 
     fugitive from justice who has been released on bail; and
       (B) does not include any--
       (i) law enforcement officer;
       (ii) attorney, accountant, or other professional licensed 
     under applicable State law;
       (iii) employee whose duties are primarily internal audit or 
     credit functions; or
       (iv) member of the Armed Forces on active duty; and
       (3) the term ``law enforcement officer'' means a public 
     servant authorized under applicable State law to conduct or 
     engage in the prevention, investigation, prosecution, or 
     adjudication of criminal offenses, including any public 
     servant engaged in corrections, parole, or probation 
     functions.

     SEC. 4. BACKGROUND CHECKS.

       (a) In General.--
       (1) Submission.--An association of bail enforcement 
     employers, which shall be designated for the purposes of this 
     section by the Attorney General, may submit to the Attorney 
     General fingerprints or other methods of positive 
     identification approved by the Attorney General, on behalf of 
     any applicant for a State license or certificate of 
     registration as a bail enforcement officer or a bail 
     enforcement employer.
       (2) Exchange.--In response to a submission under paragraph 
     (1), the Attorney General may, to the extent provided by 
     State law conforming to the requirements of the second 
     paragraph under the heading ``Federal Bureau of 
     Investigation'' and the subheading ``Salaries and Expenses'' 
     in title II of Public Law 92-544 (86 Stat. 1115), exchange, 
     for licensing and employment purposes, identification and 
     criminal history records with the State governmental agencies 
     to which the applicant has applied.
       (b) Regulations.--The Attorney General may promulgate such 
     regulations as may be necessary to carry out this section, 
     including measures relating to the security, confidentiality, 
     accuracy, use, and dissemination of information submitted or 
     exchanged under subsection (a) and to audits and 
     recordkeeping requirements relating to that information.
       (c) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Attorney General shall submit to 
     the Committees on the Judiciary of the Senate and the House 
     of Representatives a report on the number of submissions made 
     by the association of bail enforcement employers under 
     subsection (a)(1), and the disposition of each application to 
     which those submissions related.
       (d) State Participation.--It is the sense of Congress that 
     each State should participate, to the maximum extent 
     practicable, in any exchange with the Attorney General under 
     subsection (a)(2).

     SEC. 5. MODEL GUIDELINES.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Attorney General shall publish in 
     the Federal Register model guidelines for the State control 
     and regulation of persons employed or applying for employment 
     as bail enforcement officers.
       (b) Recommendations.--The guidelines published under 
     subsection (a) shall include recommendations of the Attorney 
     General regarding whether a person seeking employment as a 
     bail enforcement officer should be--
       (1) allowed to obtain such employment if that person has 
     been convicted of a felony offense under Federal law, or of 
     any offense under State law that would be a felony if charged 
     under Federal law;
       (2) required to obtain adequate liability insurance for 
     actions taken in the course of performing duties pursuant to 
     employment as a bail enforcement officer; or
       (3) prohibited, if acting in the capacity of that person as 
     a bail enforcement officer, from entering any private 
     dwelling, unless that person first knocks on the front door 
     and announces the presence of 1 or more bail enforcement 
     officers.
       (c) Byrne Grant Preference for Certain States.--
       (1) In general.--Section 505 of title I of the Omnibus 
     Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3755) 
     is amended by adding at the end the following:
       ``(e) Preference for Certain States.--Notwithstanding any 
     other provision of this part, in making grants to States 
     under this subpart, the Director shall give priority to 
     States that have adopted the model guidelines published under 
     section 5(a) of the Bounty Hunter Accountability and Quality 
     Assistance Act of 1998.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect 2 years after the date of enactment of this 
     Act.

     SEC. 6. JOINT AND SEVERAL LIABILITY FOR ACTIVITIES OF BAIL 
                   ENFORCEMENT OFFICERS.

       Notwithstanding any other provision of law, a bail 
     enforcement officer, whether acting as an independent 
     contractor or as an employee of a bail enforcement employer 
     on a bail bond, shall be considered to be the agent of that 
     bail enforcement employer for the purposes of that liability.
                                 ______
                                 
      By Mr. CONRAD (for himself, Mr. Daschle, Mr. Kennedy, Mr. 
        Lautenberg, Mr. Reed, Mr. Leahy, Mr. Dodd, Mr. Bingaman, Mr. 
        Durbin, Mr. Baucus, Mr. Dorgan, Mr. Rockefeller, Mr. Kerrey, 
        Mr. Wyden, Mr. Wellstone, Mr. Torricelli, Mrs. Boxer, Mr. 
        Kerry, Mr. Bumpers, Mr. Moynihan, Mr. Johnson, Mr. Breaux, Mr. 
        Kohl, Ms. Landrieu, Ms. Moseley-Braun, and Mr. Lieberman):
  S. 1638. A bill to help parents keep their children from starting to 
use tobacco products, to expose the tobacco industry's past misconduct 
and to stop the tobacco industry from targeting children, to eliminate 
or greatly reduce the illegal use of tobacco products by children, to 
improve the public health by reducing the overall use of tobacco, and 
for other purposes; to the Committee on Finance.


                          the healthy kids act

  Mr. CONRAD. Mr. President, I rise today to introduce legislation that 
we call the HEALTHY Kids Act. It addresses the question of how we form 
a national policy on tobacco.

  I am joined in cosponsorship by Senators Akaka, Baucus, Bingaman,

[[Page S739]]

Boxer, Breaux, Bryan, Bumpers, Daschle, Dodd, Dorgan, Durbin, Johnson, 
Kennedy, Bob Kerrey, John Kerry, Kohl, Landrieu, Lautenberg, Leahy, 
Moseley-Braun, Moynihan, Reed, Rockefeller, Torricelli, Wellstone, and 
Wyden. And we have additional Senators who are considering 
cosponsorship of this legislation as we speak.
  First of all, I thank the Democratic leader, Senator Daschle, for his 
strong leadership and support of the work of the task force. Months ago 
he called me and asked me to head up an effort within the Democratic 
Caucus to draft tobacco legislation. We have engaged 21 members of this 
task force in a lengthy effort to listen to those affected and to try 
to craft a responsible national tobacco policy.
  We held 18 hearings. We heard over 100 witnesses. We held hearings 
across the country. We engaged in this level of effort because the 
subject is so important.
  Tobacco is the only product that when used legally--and as the 
manufacturer intended--addicts and kills its customers.
  For too long tobacco companies have waged war on our kids. It is time 
to counterattack.
  For too long big tobacco has hooked our kids on a lifelong addiction. 
It is time to stop it.
  For too long the tobacco industry has deliberately targeted kids as 
``replacement smokers'' to fill the shoes of over 425,000 Americans 
killed by tobacco each year.
  Let me repeat that. Over 400,000 deaths a year in this country are 
caused by the use of tobacco products. Many more, as we have heard in 
our hearings, have suffered terribly. As we heard Monday at a hearing 
in Newark, NJ, when we heard from Pierce Frauenheim, a coach and 
assistant principal who had a laryngectomy because of throat cancer 
caused by the use of tobacco products. He told us of the terror and 
trauma of that illness. And we heard from a young woman named Gina 
Seagrave, a young woman who lost her mother to a massive heart attack 
when she was only 45 years of age because of using tobacco products. 
Her tears told the story of her family's pain and suffering.
  Mr. President, those stories are rewritten day in and day out because 
of the awful effects of tobacco. There is something we can do about it 
if only we have the political will and the courage to act. Witnesses 
told us repeatedly that we need a comprehensive plan to dramatically 
reduce the use of tobacco products in our country. That is what we 
present today--the HEALTHY Kids Act.
  Mr. President, the HEALTHY Kids Act is the work of the Senate 
Democratic task force on tobacco legislation. The HEALTHY Kids Act 
provides responsible tobacco policy. It protects children, promotes the 
public health, helps tobacco farmers, and resolves Federal, State and 
local legal claims, without providing immunity to the industry; it 
invests in children and health care; it provides savings for Social 
Security and Medicare; and it reimburses taxpayers for costs that have 
been imposed on them by the use of these products.
  The HEALTHY Kids Act protects children. It does that with a healthy 
price increase--a $1.50 a pack health fee phased in over 3 years. It 
protects children by providing the Food and Drug Administration with 
full authority to regulate these products. It provides strong penalties 
for those companies that fail to reach the targeted projection for the 
reduction of teen smoking--a 67 percent reduction in teen smoking over 
the next 10 years. Those penalties are a 10-cent a pack penalty 
industry wide if the goals are not met and a 40-cent a pack penalty for 
the individual companies for their failure to reach the objective. We 
also protect children by providing comprehensive antitobacco programs. 
Included in that are counteradvertising, prevention programs, smoking 
cessation programs and research. Finally, in protecting children, we 
provide for retailer compliance--State licensure of retailers and no 
sales to minors.
  The HEALTHY Kids Act also promotes the public health. It does so by 
addressing the question of secondhand smoke. Most public facilities in 
the country would be smoke free under our proposal. We would provide 
exemptions for bars, casinos, bingo parlors, hotel guest rooms--that 
is, hotels could have smoking and nonsmoking rooms as they do now--
nonfast-food small restaurants, that is, those restaurants with less 
than 50 seats would be exempt; prisons, tobacco shops, and private 
clubs. At the same time we provide those exemptions, we also provide 
for no State preemption. If a State or local unit of government wants 
to have more stringent provisions, it is free to do so.
  We also promote the public health by protecting the public's right to 
know. We provide for full document disclosure; all relevant documents 
go to the FDA. The FDA is able to make those documents public; and the 
public health interest overrides trade secret or attorney-client 
privileges when the FDA makes a determination that the public health is 
the overriding interest.
  We also provide for international tobacco marketing controls: no 
promotion of U.S. tobacco exports. I am proud to say that in this 
administration we are not doing that, but in previous administrations 
they have. This would codify the conduct of this administration and 
provide for no promotion of U.S. tobacco exports. It also provides a 
code of conduct. No marketing to foreign children. Any activities 
carried out in this country to market to children in another country 
would be illegal. It also has modest funding for international tobacco 
control efforts. And we require warning labels, warning labels of the 
country that is the recipient of products sent from this country. And 
if they do not have a system of warning labels, then our own warning 
labels would apply.

  The HEALTHY Kids Act also helps tobacco farmers. They were left out 
of the proposed settlement completely. Their interest was not 
addressed. We do not think that is fair. We provide $10 billion in just 
the first 5 years for assistance to farmers and their communities. We 
authorize funding for transition payments to farmers and quota holders. 
We provide for rural and community economic development retraining for 
tobacco factory workers and tobacco farmers and even college 
scholarships for farm families if the committees of Congress deem that 
appropriate.
  The HEALTHY Kids Act makes very clear that we will not provide 
immunity to this industry, no special protection for future misconduct, 
no special protection against individual lawsuits for past misconduct. 
We do resolve the outstanding Federal, State, and local government 
legal claims. States, however, can opt out of this national settlement 
if they so choose, and cities and counties are assured of getting a 
fair share of reimbursements that go to States.
  On the question of attorney's fees, we concluded that no monies from 
the HEALTHY Kids Act should be used for attorney's fees. With respect 
to the size of the fees, we deliberated long and hard, listened to all 
of the affected interests and concluded that the attorney's fees in 
these cases ought to be resolved by arbitration panels using ABA 
ethical guidelines. Those guidelines are set out with specificity in 
the legislation that I will introduce today.
  And so if we are in a circumstance like the controversy in Florida, 
if the parties cannot agree, an arbitration panel would resolve the 
matter and determine what the attorney's fees were in the case that has 
been settled. That is also the case in other States. If the parties at 
interest reach agreement among themselves, there would not be an 
arbitration panel. But where there is disagreement as to what the 
appropriate attorney fees should be, an arbitration panel would be 
empowered to make the determination.
  I do not think any of us want to see unjust enrichment of anybody 
based on a resolution of these tobacco issues and tobacco lawsuits 
around the country.
  Mr. President, the HEALTHY Kids Act invests in children, in health, 
in savings for Social Security and Medicare, and reimburses taxpayers 
who have had costs imposed on them.
  The distribution of the funds raised by the act is as follows: 
Payments to States are 41.5 percent of the revenues. The States would 
get 14\1/2\ percent of the money unrestricted; 27 percent would go to 
the States for children's health care, child care and improved 
education.

[[Page S740]]

  We would also provide 15.5 percent for antitobacco programs. That 
includes counteradvertising campaigns as well as smoking cessation and 
smoking prevention programs. NIH health research would be increased. 
They would receive 21 percent of the funds provided. Medicare would get 
4 percent of the money initially but over time that would grow to 10 
percent. Similarly, Social Security would get 6 percent of the money 
initially and that would grow to 12 percent over time.
  We believe it is appropriate when you receive a windfall not to spend 
it all, and so we are providing that when the program is fully phased 
in, over 20 percent of the money, instead of being spent, will be used 
to strengthen Medicare and Social Security for the future.
  That is what the American people want to see happen, and we have 
provided for it in this legislation. Farmers initially get 12 percent 
of the revenues to ease their transition. Obviously, they are going to 
take an economic hit here, and it seemed fair to us that they be 
included in any package to resolve these controversies. Over time their 
part of this package would be phased out and then the Medicare and 
Social Security parts of the legislation would see their share 
increased.

  Mr. President, we have provided here a comparison of the tobacco 
revenue and spending, a comparison between what the President's budget 
called for and what The HEALTHY Kids Act calls for. First of all, in 
terms of total revenue, our plan would raise $82 billion over the next 
5 years, some $500 billion over the next 25 years. In the first 5 
years, the States would get in an unrestricted way $12 billion. They 
would get $22 billion for children--$14 billion for child care, $3 
billion for health care for children and $5 billion for education. The 
research component of the plan would provide $17 billion to the 
National Institutes of Health for increased health research. Medicare 
initially would get $3 billion in the first 5 years. The farmers would 
get $10 billion. That is a 5-year figure. The antitobacco efforts would 
receive $13 billion, and savings for Social Security would be $5 
billion.
  Mr. President, The HEALTHY Kids Act is supported by the American 
public. We did extensive national polling to make certain that what we 
are proposing is in line with what the American people want and the 
polling data shows a high level of support for a significant per pack 
price increase which we have termed a health fee, significant public 
support for strong lookback penalties for failure to meet the goals of 
reducing teen smoking and no special protections for this industry.
  That is what the American people want. That is what The HEALTHY Kids 
Act provides. With respect to the question of a $1.50 per pack health 
fee for youth smoking deterrence and health programs, the American 
people support that by more than a 2-to-1 margin--65 percent in favor, 
30 percent opposed. By the way, this is across party lines, across 
regional lines. The American people support a $1.50 a pack health fee. 
The price increase support for youth smoking deterrence and health 
programs cuts across party lines. The poll shows if it is termed tax 
support it is very strong all across the country, even stronger if it 
is for a health fee. In fact, 69 percent of Democrats support the $1.50 
health fee, 67 percent of Republicans.
  There is also strong public support for a lookback penalty of 50 
cents a pack if the industry fails to meet the goals for the reduction 
of teen smoking. By 54 percent to 34 percent the American public 
supports lookback penalties of 50 cents a pack or more. In fact, a 
significant majority of the 54 percent support a dollar a pack lookback 
penalty.
  Voters are also strongly opposed to providing special protections to 
the tobacco industry. When we asked the American people: Do you want to 
give immunity to this industry? Do you want to give them special 
protection going forward? By 55 percent to 32 percent, they oppose any 
special protections being given to this industry. They say no to 
immunity. The HEALTHY Kids Act says no to immunity.
  The HEALTHY Kids Act accomplishes the objectives laid out by 
President Clinton. He laid out five. He said you have to reduce teen 
smoking by providing tough penalties and a health fee or price increase 
that will deter youth smoking. We have full FDA authority. We are 
changing the industry culture. We meet the additional health goals laid 
out by the President, and protect tobacco farmers and their 
communities.
  As the Vice President said yesterday when we unveiled this proposal 
in a press conference here on Capitol Hill: The administration strongly 
supports this bill.
  The Vice President reported that if this bill comes to the 
President's desk, he will sign it and sign it without hesitation.
  I expect that big tobacco will fight these initiatives. Indeed, we 
saw yesterday they came out swinging against the proposal that I am 
offering here today. We will hear from the tobacco industry, its 
lobbyists and its supporters in Congress, that we cannot have a health 
fee of $1.50 a pack, we can't fund public health programs or hold the 
industry and tobacco companies accountable if they sell to kids. We 
will hear from them that we cannot give FDA the same authority it has 
over prescription drugs and our food supply.
  I submit, if we care about our kids' futures, we must do all of these 
things. This legislation lays down a marker for good, responsible, 
national tobacco policy to protect our kids and promote the public 
health. It sets a clear, unambiguous test against which other 
legislation can be measured. And it sets a challenge for those who say 
they want to protect our kids but have so far not produced effective 
tobacco control legislation. The HEALTHY Kids Act recognizes that 
tobacco is causing addiction, disease and death. It also recognizes 
that there is something we can do about it. HEALTHY Kids affirms life 
and health and our commitment to our children. It tells you we can make 
a difference.
  I invite my colleagues to join in a bipartisan effort to pass 
legislation like we are offering here today. We can do it and we can 
make a difference. We can reduce the addiction, the disease and the 
death that is being caused by the use of tobacco products. Now is the 
time to act. The public supports it. Again, I ask my colleagues on both 
sides of the aisle to join us in this effort. There is no reason for 
this to be a partisan issue. There is every reason for us to work 
together to resolve the challenges posed to our society by the use of 
these products.
  Mr. President, I note a colleague of mine, Senator Reed of Rhode 
Island, is on the floor. Senator Reed played a critical role in the 
development of this legislation. He was one of the most active 
participants on the task force who has worked for months to fashion 
these legislative proposals. I commend Senator Reed publicly for his 
contributions to this effort.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Mr. President, I rise today to join my colleague, Senator 
Conrad from North Dakota, in supporting and introducing the HEALTHY 
Kids Act and thank him for his kind words. I must say, if there is 
anyone who has been a true leader and true hero in this struggle to 
date, it has been Kent Conrad, whose leadership helped pull together 
not only an impressive array of cosponsors but, with over hundreds of 
witnesses and many, many sessions, he was able to get to the substance 
of a very complicated and difficult issue: How are we going to respond 
to the crisis of teenage smoking in the United States? How are we going 
to protect the public health of America, particularly America's 
children?
  Today we are introducing the HEALTHY Kids Act, which will, I believe, 
do that. Again, I commend Senator Conrad for his great leadership and 
effort, and I look forward to working with him and all my colleagues to 
develop legislation that will once and for all prevent the illegal sale 
of cigarettes to children in this country.
  We are all aware of the depressing statistics with respect to smoking 
and children in the United States. Today, some 50 million Americans are 
addicted to tobacco smoke. Every year, 1 million children become 
regular users of cigarettes, tobacco. One-third of them will die 
prematurely of lung cancer, emphysema, or other horrible smoking 
related illnesses.

[[Page S741]]

  This is an addiction. Fully three-quarters of smokers want to quit 
but they cannot because they are addicted. The most disturbing aspect 
of this addiction is it begins with young people. Mr. President, 90 
percent of adult smokers today began to smoke while they were 18 years 
old or less. In fact, this goes down to children who are 10, 11, 12 
years old. It is a shocking, disturbing, and all-too-real aspect of 
American life and culture. We have an opportunity, indeed an 
obligation, to do something about it. That is why I am here, along with 
Senator Conrad, to join in the introduction of this HEALTHY Kids Act.

  In my home State of Rhode Island, we have a situation in which adult 
smoking is beginning to stabilize. Unfortunately, teen smoking 
continues to rise, with a more than 25 percent increase among high 
school students. That is a bad omen for the future, a bad omen for the 
country. It is too easy for children to buy cigarettes. It is too easy, 
in a climate in which the tobacco industry spends upward of $5 billion 
a year making cigarette smoking appear to be alluring, sophisticated, 
adult-oriented--all those things which are attractive to children.
  We know from the record that has emerged over the last several months 
in court proceedings that this is not a coincidence, we know that 
children have been deliberately targeted by cigarette companies. They 
are the replacement customers for the 400,000 Americans who die each 
year of smoking-related diseases. We have to stop that insidious 
replacement, that insidious attack on the youth of America.
  We begin this legislative process in a situation in which the tobacco 
industry has worked hard to earn the distrust--let me say it again--the 
distrust of the American people. Over the years they have not been 
candid. They have deliberately confused, fought against, and frustrated 
attempts to regulate their product in the marketplace.
  I recently came across an interesting story about youthful smoking 
among boys. One of the research scientists said, ``The cigarette smoker 
is slowly and surely poisoning himself and is largely unconscious of 
it.'' That report was in Education Magazine in 1909. The tobacco 
industry has long known that cigarette smoking is harmful to children, 
and harmful to public health.
  In 1963, Battelle Laboratories in Switzerland did a series of studies 
for the British American Tobacco Company, that's the parent of Brown & 
Williamson Tobacco Company. The conclusion, after review of these 
studies by the general counsel of Brown & Williamson, was shown as 
follows: ``We are then in the business of selling nicotine, an 
addictive drug, effective in the release of stress mechanisms.'' Since 
1960, the industry has known they were selling an addictive product, 
and has known they were selling a product that killed people.
  It has all, though, been obscured and dressed up by advertising that 
would suggest to everyone that smoking is not harmful; indeed, claiming 
it is healthful. That is absolutely wrong. Back in the 1920s, the 
companies that were selling cigarettes were advertising themes like, 
``20,679 physicians say Luckies are less irritating.'' Promoting 
cigarettes, in effect, as a healthful practice and not a harmful 
practice. Another theme of those days was, ``For digestion's sake, 
smoke Camels.'' Again emphasizing an illusory therapeutic value that 
never existed in cigarettes.
  In 1953, an advertisement read, ``This is it. L&M filters are just 
what the doctor ordered.'' As if the medical profession was endorsing a 
product which they knew was harmful and which they suspected, but 
perhaps did not yet know, was highly addictive.
  In this Congress, we have tried to rein in the use of tobacco by 
children, tried to control the access of young people and tried to warn 
the American public about the dangers of tobacco. In the 1960s, we 
brought the industry, we thought, kicking and screaming to accept 
legislatively mandated warning label. Only after the fact did we learn 
that the industry privately accepted this label as a good fortune 
because it allowed them to defend themselves in court with the notion 
that smokers assumed the risk because they read these labels. Only 
recently, with the evidence that is more and more conclusive each day 
of the addictive quality of cigarettes, has the industry begun to 
respond.

  Today we are here to ensure that the past is not repeated, the past 
of addiction of young people to cigarettes and the past of a very 
pliant Congress, not effectively regulating the tobacco industry. That 
is why the HEALTHY Kids Act is so important. It represents a 
comprehensive effort to ensure that our children are safe and the 
public health is protected.
  One of the important elements of this bill is a price increase of 
$1.50 a pack. This is not in any way an attempt of retribution on the 
industry. Rather, it recognizes the fact that a price increase is 
probably the strongest deterrent there is to teenage smoking. Unlike 
adult smokers who may already very well addicted, teenagers will 
respond to price increases. A price increase is one sure way, perhaps 
the best way, we can ensure that teenagers do not smoke.
  The second aspect of the act is giving the FDA full authority over 
tobacco products, all tobacco products. This proposal would not 
condition their authority; it would give the FDA the authority, the 
responsibility, the obligation to regulate tobacco as it regulates so 
many other drugs and so many other products in our society.
  This legislation also includes strong look-back penalties. The 
HEALTHY Kids Act would set a goal of reducing teenage smoking rates by 
67 percent in 10 years and would hold manufacturers accountable for 
these tough goals by imposing 10-cent-a-pack penalties on the industry 
across the board and 40-cent penalties on brand-specific products that 
do not meet the targeted reductions. There would be no rebate. In the 
proposal the industry negotiated with the Attorneys General, there 
would be the possibility of a company receiving a rebate by just trying 
hard. This legislation would require the goal be met, not simply the 
effort be made. This would also include comprehensive anti-smoking 
programs, through advertising, prevention programs, and other means 
that would help ensure that children do not smoke. These program would 
also give adults, if they wish to change, access to programs to make 
sure they can make that transition from smoking to nonsmoking.
  Because of the money that is generated, we will be able to commit 
significant resources to programs that are extremely important, 
programs that have been outlined so well by Senator Conrad: education, 
child care, health resources.
  Also, this legislation, importantly, does not curtail prospective 
liability for the tobacco industry. It would settle the suits that have 
been lodged by the State attorneys general. Also, it would settle 
claims with respect to governmental entities, but it would allow 
individual citizens who have been harmed and who will be harmed by 
tobacco smoke to bring their case to court.
  I believe this is a crucial part of the legislation, because without 
this, the other mechanisms that we develop may well be undermined by 
sophisticated corporate reorganizations by the industry, by challenges 
to aspects of the law, and by many things which the tobacco companies 
have done in the past to remake themselves to comply with Federal 
statutes. Statutes which Congress thought would control their behavior 
but which in many cases not only did not control their behavior but 
gave the tobacco companies additional ammunition to defend themselves 
against civil suits in the courts.
  I believe that this liability issue is an important one and one that 
distinguishes this legislation from others that have been introduced in 
this Congress.
  We here today have the opportunity to do what all Americans want us 
to do, ensure that children do not have ready access to cigarettes, 
ensure that the next generation of Americans is not addicted before 
they become adults, ensure that the public health in this country is 
protected, ensure that we are able to create an environment in which a 
parent does not have to confront what must be one of the most harrowing 
moments, the realization that a young son or a young daughter is 
beginning to smoke and realizing also, as we do today, that that means 
that this child will die prematurely.
  No parent should have to endure that moment. No child should have to 
be subject to the barrage of advertising,

[[Page S742]]

the barrage of influences which have forced that child to smoke 
cigarettes. I look forward to working with my colleagues to enact this 
bill and to meet these goals. I look forward, as we all do, to the day 
in which cigarette smoking is not something that we associate with the 
youth of this country.
  I yield my time.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I want to just take a few moments this 
afternoon to express my very warm appreciation to Senator Conrad for 
the leadership that he has provided in bringing together a variety of 
different views and offering on behalf of the families of this country 
an absolutely superb proposal that is focused on how we are going to 
reduce smoking for the young people of this country.
  This bill isn't the perfect solution, but I daresay that if this 
particular legislative proposal was enacted into law it would save the 
lives of millions of Americans.
  This has been a long process, Mr. President, since the first Surgeon 
General pointed out the dangers of smoking. This has been a constant 
effort over many, many years to try and address this issue in a 
comprehensive and responsible way.
  All of us take our hats off to the work that was done by the 
attorneys general that resulted in the June 20 settlement. But the 
legislation Senator Conrad has introduced today is really a very, very 
comprehensive proposal that, in many respects, may be the most 
important legislative undertaking that we will have in this Congress.
  Senator Conrad and the other members of the task force should be 
commended in putting this proposal forward so early in the Congress. We 
know we have maybe 90 days left in this session, but I daresay that our 
time could not be more beneficially spent than in the debate and the 
discussion of this legislation.
  I join with those in hoping that we can get thoughtful consideration 
of this legislation in the committee on the floor of the Senate. It 
incorporates the principles that have been identified by the public 
health community and those who have studied this issue over a long 
period of time which are most important in reducing smoking:
  No. 1, raising the cost of cigarettes in a substantial way over a 
short period of time. In addition, the counteradvertising measures are 
very, very important. Those two measures in tandem can make a dramatic 
difference in the number of young people who will smoke in the future.
  The strong FDA measures will also make sure the Agency will have the 
power and the authority to regulate nicotine and the other additives in 
cigarettes.
  I think the attention that was given in the secondhand smoking 
proposals and also in recognizing our responsibilities of promoting 
cigarettes overseas are very thoughtful suggestions in these areas.
  I want to add that I believe it is so important that the revenues 
that are raised from this proposal will give a substantial boost to 
programs that affect the children of this country. A very substantial 
part of the financial resources that are gained when this legislation 
is enacted will be focused on the children who have been the focus of 
the tobacco industry for over a long, long period of time. I commend 
the Senator and the task force for that commitment to the nation's 
children.
  Secondly, there is an equally strong commitment towards supporting 
the biomedical research which offers such extraordinary opportunities 
for breakthroughs, not only in children's diseases but in other medical 
conditions such as cancer, AIDS, heart disease, diabetes, Alzheimer's 
Disease, and mental illness.
  This legislation can make a major difference in the public health of 
the nation by reducing youth smoking. It can also make a major 
difference to the children of this nation in focusing resources to make 
their lives more hopeful in the future. And it can make a major 
difference in terms of the biomedical research opportunities at NIH 
which offer extraordinary hope in finding treatments for some of the 
nation's most severe medical conditions.
  For all these reasons, this legislation should go forward. As Senator 
Conrad has pointed out, he welcomes the chance for others to join in 
strong support of this legislation, but certainly it is the challenge 
that is laid out here. Others will have views. We hope they will come 
forward.
  What we have heard so far is a deafening silence. I don't think the 
American people are going to tolerate a silence in blind opposition to 
what has been a very thoughtful, a very comprehensive, and a very 
detailed response to something that is of central importance to every 
family in this country.
  I commend the Senator from North Dakota for all of his work and 
indicate a great desire to work closely with him and the others to make 
sure this legislation becomes law.
  Mr. CONRAD addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, I thank Senator Kennedy. He has been an 
outstanding member of this task force team. No member of the task force 
contributed more to the work of this group than Senator Kennedy. He has 
played an absolutely key role in the development of this legislation, 
through his own efforts and the efforts of his outstanding staff. He 
has been a leader for a lifetime on these issues, and I extend my 
deepest personal appreciation to him for his assistance and support.
  I would also like to recognize Senator Baucus, who is on the floor. 
Senator Baucus who is an original cosponsor of this bill has been 
enormously helpful as well. He is a member of the Senate Finance 
Committee and has a special understanding of the financial aspects of 
this legislation. I thank Senator Baucus for his commitment and his 
leadership as well.
  Let me conclude by thanking my staff who have worked very long hours 
to produce this legislation: Bob Van Heuvelen, my policy director and 
chief counsel; Tom Mahr who is the person on my staff who heads up all 
of the health issues who has worked incredibly hard and with great 
skill to craft this legislation; Monica Boudjouk who has spent many a 
long evening helping us to put together the many details of the 
proposal before us; and Mark Harsch, a fellow on my staff who has been 
enormously helpful as well.
  I thank them all for their contributions, as well as the staff of the 
other task force members who put a great deal of time and effort into 
working to produce this bill. I thank them all.
  Mr. BAUCUS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, the Senator from North Dakota is much too 
kind in his compliments of this Senator. The real credit goes to the 
Senator from North Dakota. We have seen many task forces appointed by 
various leaders on both sides of the aisle. I think we know that most 
task forces basically do their work. They meet, they have several 
meetings, and are earnest in trying to come up with a good solution 
assigned to them by the leader.
  In this case, the Senator from North Dakota added new meaning to the 
definition of task force. First of all, they tasked; they worked very 
hard. I have not seen any effort since the days I have been in the 
Senate where a task force, a group worked so hard at so many meetings, 
called in so many outside experts in such a wide variety of fields to 
make sure they came up with a very solid, comprehensive, near bullet-
proof proposal in an area that is as complicated as this, whether it is 
taxation issues, whether it is health issues, whether it is judicial 
issues, whatever they may be.
  All of us who have any knowledge of the degree to which the Senator 
from North Dakota put this group together salute him. I have never seen 
anybody work as hard, as diligently and come up with such a fine 
product as the Senator from North Dakota. I hope that future task 
forces use his as a model, because if they do, the people of our 
country will be very, very well served, just as the Senator from North 
Dakota's task force has served America with his efforts and his work. 
He has done the best job of any Senator I have ever seen on any kind of 
task force or group effort trying to come up with a solution to a very 
complicated problem. Again, I salute him.

[[Page S743]]

  Mr. President, I ask unanimous consent that the following letters of 
support for the Healthy Kids Act be submitted into the Record following 
my remarks.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

 Joint Statement of Drs. Koop and Kessler on the Conrad Task Force Bill

       ``We have been working steadfastly with Republican and 
     Democratic legislators to help fashion comprehensive tobacco 
     legislation that will have the net effect of reducing the 
     number of people who smoke and fundamentally changing the way 
     the tobacco industry does business without granting them 
     immunity or special concessions.
       ``The principles in the Conrad task force legislation track 
     closely with the public health principles and goals outlined 
     in the report of the Advisory Committee on Tobacco Policy and 
     Public Health. It is a good step in a legislative process 
     that we hope results in concrete, comprehensive public health 
     measures to reduce the harm from smoking.
       ``We look forward to working with Sen. Conrad and all other 
     members of the Congress to achieve these important public 
     health goals.''
                                  ____


    Statement of Hubert H. Humphrey III, Attorney General, State of 
                               Minnesota

     Re: Senator Kent Conrad's Healthy Kids Act, Wednesday, 
         February 11, 1998
       I commend Senator Conrad for his leadership of the Senate 
     Democratic Tobacco Task Force in its efforts to address the 
     number one public health issue of our day. The Healthy Kids 
     Act, proposed by Senator Conrad today, is a monumental step 
     forward in our efforts to advance public health and protest 
     future generations of kids.
       Senator Conrad's bill offers the best hope yet for saving 
     our children from tobacco addiction, disease and death. It's 
     a common sense approach that will reduce youth smoking rates 
     dramatically and hold the tobacco industry accountable for 
     results.
       The bill's strong financial penalties against the industry 
     for continuing to sell to kids creates a powerful economic 
     incentive to reform this industry's conduct. And by giving 
     the FDA full authority and oversight over the health hazards 
     of tobacco, the tobacco industry's manipulation of nicotine 
     to keep smokers addicted will finally come to an end.
       This bill stands in stark contrast to the sweetheart deal 
     proposed by the tobacco industry last summer. and it's 
     because Senator Conrad and the Task Force asked the right 
     question. Instead of asking ``what will the industry 
     accept,'' Senator Conrad asked ``what is the right policy for 
     the nation.'' And the result is a bill that gets it right for 
     our children without giving this outlaw industry any special 
     immunity that no other business in America enjoys.
                                  ____



                             National Association of Counties,

                                Washington, DC, February 11, 1998.
     Hon. Kent Conrad,
     U.S. Senate, Washington, DC.
       Dear Senator Conrad: The National Association of Counties 
     (NACo) is pleased to support your bill, the Healthy Kids Act. 
     Not only does the legislation recognize the important health 
     responsibilities counties assume in the nation's 
     intergovernmental system, it also acknowledges the 
     responsibilities they have for enforcing tobacco control 
     ordinances. The bill is a very strong step forward for public 
     health.
       As we understand it, the Healthy Kids Act recognizes the 
     unique and substantial tobacco-related health care costs 
     counties incur separate from the states' costs. As you know, 
     counties provide health care to individuals who have no 
     private or federally subsidized insurance, such as Medicaid. 
     Counties provide uncompensated care under general medical 
     assistance programs; through their health facilities; and/or 
     make payments to other facilities. Many also contribute 
     directly to the non-federal share of Medicaid. A number of 
     local governments filed suit against the tobacco industry 
     prior to the June 1997 proposed settlement using these facts 
     as a basis for part of their arguments.
       We are also pleased to understand that county tobacco laws 
     and enforcement activities would not be preempted by federal 
     law under the bill. Counties must continue to be able to 
     enact and enforce, with locally-determined remedies, local 
     tobacco ordinances and penalties which are stronger than 
     state or federal law.
       Thank you again for your leadership on this issue. NACo 
     looks forward to working with you to advance and refine the 
     Healthy Kids Act.
           Very Truly Yours,

                                                Randy Johnson,

                                                  President, NACo,
     Hennepin County Commissioner.
                                  ____



                           American Public Health Association,

                                Washington, DC, February 11, 1998.
     Hon. Kent Conrad,
     U.S. Senate,
     Washington, DC.
       Dear Senator Conrad: The American Public Health Association 
     (APHA), consisting of more than 50,000 public health 
     professionals dedicated to advancing the nation's health, 
     commends you for developing a comprehensive tobacco bill that 
     is a significant step forward toward protecting public 
     health, especially our nation's children and adolescents.
       Your legislation addresses many priority issues for APHA 
     and the public health community and we recognize that in 
     these areas your bill provides stronger than the proposed 
     settlement and many other current tobacco proposals in the 
     Senate. APHA is particularly pleased with the following 
     aspects of your tobacco bill:
       Reaffirmation of FDA jurisdiction over tobacco products, 
     especially the codification of the tobacco-related 
     regulations promulgated this summer by the Secretary of 
     Health and Human Services;
       Preservation of state and local authority to impose 
     stronger requirements, prohibitions, and other measures to 
     control tobacco;
       Creation of a national tobacco surveillance and evaluation 
     program at the US Centers for Disease Control and Prevention 
     to monitor patterns of tobacco use and assess the 
     effectiveness of tobacco control efforts.
       Requirement that tobacco control initiatives and programs 
     funded under this bill utilize proven and effective 
     methodologies;
       Recognition that certain subpopulations, such as women and 
     minorities, are disproportionately affected by tobacco 
     products and calling for research to be conducted to study 
     different effects of tobacco use on these groups;
       Assistance to tobacco growers, their families, and 
     communities;
       Creation of an international code-of-conduct for tobacco 
     companies to help protect children and adults in other 
     countries from the dangers of tobacco products;
       Support for international tobacco control efforts, 
     including the funding of bilateral and multilateral 
     assistance and the creation of a non-governmental 
     organization to work with other NGOs abroad on tobacco 
     control;
       Ban on the use of taxpayer money to help promote U.S. 
     tobacco products overseas;
       Health care assistance to uninsured and underinsured 
     individuals with financial hardship who suffer from tobacco-
     related illnesses and conditions;
       Strengthen look-back provisions to ensure that tobacco 
     companies are held accountable if adolescent smoking rates do 
     not decrease;
       No special legal protections for tobacco companies.
       As you work with your Senate colleagues on moving tobacco 
     legislation, we urge you to consider strengthening the public 
     health title of the bill. Specifically, APHA advocates 
     stronger involvement of the Centers for Disease Control and 
     Prevention and state and local health departments in the 
     myriad public health activities funded under this title, 
     increased funding for the public health initiatives under 
     this title, inclusion of additional public health tobacco use 
     prevention and reduction initiatives such as environmental 
     tobacco smoke education programs and research, and other 
     public health and prevention focused efforts.
       We are committed to working with you and your Senate 
     colleagues from both sides of the aisle to ensure that the 
     final tobacco control legislative vehicle is the strongest 
     possible national tobacco policy. We appreciate your efforts 
     to ensure the protection and promotion of public health and 
     offer our assistance as you continue to work on this issue of 
     critical global public health significance.
           Sincerely,

                                 Richard A. Levinson, MD, DPA,

                                     Associate Executive Director,
     Programs and Policy.
                                  ____



                                    American Lung Association,

                                Washington, DC, February 11, 1998.
     Hon. Kent Conrad,
     U.S. Senate, Washington, DC.
       Dear Senator Conrad: The American Lung Association is 
     pleased to endorse your tough tobacco legislation--The 
     Healthy Kids Act. This is the legislation the American people 
     have been demanding. It is not a deal for the tobacco 
     industry. It is a promise to our children. We are grateful 
     that you have made your legislative priority public health, 
     not saving the tobacco industry.
       Americans oppose special deals for Big Tobacco. This 
     legislation reflects that sentiment and does not create 
     unprecedented special protections for the tobacco industry.
       Americans know that in their own communities they can pass 
     even stronger public health laws than those passed at the 
     federal level. This bill respects the rights of state and 
     local governments to continue to pass strong measures.
       This bill promises to create a solid national tobacco 
     policy that will improve health. The American Lung 
     Association believes that your approach will succeed.
       Public opinion polling conducted recently for the American 
     Lung Association and its medical section, the American 
     Thoracic Society, found that voters overwhelmingly support 
     (65% to 30%) the $1.50 per pack fee on cigarettes. Voters 
     also support stiff penalties on tobacco companies if they 
     continue to sell to our children (54% support a per pack 
     penalty of $0.50 or more compared to 28% who want no 
     penalty). The electorate opposes special protections for the 
     tobacco industry (55% to 32%). Nearly seven out of ten voters 
     (69% to 33%) want the tobacco companies to follow the same 
     rules on marketing to children overseas as they do in the 
     U.S. It is clear that your bill is in sync with the will of 
     the American people.
       The American Lung Association hopes that Congress will 
     follow your lead--keep this

[[Page S744]]

     promise to our children--and enact the Healthy Kids Act into 
     law.
           Sincerely,
                                                 John R. Garrison,
     CEO and Managing Director.
                                  ____


  Statement of the ENACT Coalition Regarding the Introduction of The 
                            Healthy Kids Act

       (February 11, 1998) The ENACT coalition of major public 
     health organizations applauds today's introduction of the 
     Healthy Kids Act by Senator Conrad and his co-sponsors. We 
     support a strong comprehensive approach and welcome this 
     bill.
       The Healthy Kids Act encompasses the key policies that 
     ENACT has stated must be included in any effective tobacco 
     control legislation. The bill contains strong and effective 
     provisions regarding FDA authority over tobacco sales, 
     manufacturing and advertising; significant price increases to 
     deter use by kids; effective ``look-back'' penalties if sales 
     to youth don't decrease; a vigorous crackdown on the illegal 
     sale of tobacco to minors; protections from secondhand smoke; 
     disclosure of tobacco industry documents; assistance to 
     tobacco farmers; and support for efforts to reduce tobacco 
     use internationally.
       ENACT believes that only a comprehensive bill that meets 
     our minimum criteria can adequately address the complex 
     problem of tobacco use and reduce the number of kids who 
     start using tobacco, and the number of adults who die each 
     year.
       We expect a number of additional proposals to be introduced 
     in the House and Senate in the coming weeks. We will evaluate 
     each of them, and those already introduced, for their 
     adherence to the public health principles we have set forth. 
     ENACT is committed to working with Senator Conrad and with 
     Members of Congress from both parties to enact a 
     comprehensive, bi-partisan, well-funded and sustainable 
     tobacco control policy.


              ENACT coalition members (February 11, 1998)

       Allergy and Asthma Network--Mothers of Asthmatics, Inc.
       American Academy of Child & Adolescent Psychiatry.
       American Academy of Family Physicians.
       American Academy of Pediatrics.
       American Association for Respiratory Care.
       American Association of Physicians of Indian Origin.
       American Cancer Society.
       American College of Cardiology.
       American College of Chest Physicians.
       American College of Occupational and Environmental 
     Medicine.
       American College of Physicians.
       American College of Preventive Medicine.
       American Heart Association.
       American Medical Association.
       American Psychiatric Association.
       American Psychological Association.
       American Society of Anesthesiologists.
       American Society of Clinical Oncology.
       American Society of Internal Medicine.
       Association of American Medical Colleges.
       Association of Black Cardiologists, Inc.
       Association of Maternal and Child Health Programs.
       Association of Schools of Public Health.
       Campaign for Tobacco-Free Kids.
       College on Problems of Drug Dependence.
       Council of State & Territorial Epidemiologists.
       Family Voices.
       The HMO Group.
       Interreligious Coalition on Smoking OR Health.
       Latino Council on Alcohol & Tobacco.
       National Association of Children's Hospitals.
       National Association of County and City Health Officials.
       National Association of Local Boards of Health.
       National Hispanic Medical Association.
       Oncology Nursing Society.
       Partnership for Prevention.
       Society for Public Health Education.
       The Society for Research on Nicotine and Tobacco.
       The Society of Behavioral Medicine.
       Summit Health Coalition.
       A number of the nation's major public health organizations 
     have formed ENACT (Effective National Action to Control 
     Tobacco). This growing coalition has pledged to work with the 
     Congress, the Administration, the public health community and 
     the American people to pass comprehensive, sustainable, 
     effective, well-funded national tobacco control legislation.
                                  ____


 Statement by the Coalition for Workers' Health Care Funds Supporting 
         the Senate Democratic Task Force ``Healthy Kids'' Bill

       The Coalition for Workers' Health Care Funds represents 
     some 2,500 union sponsored, multiemployer health and welfare 
     funds which have brought class action law suits against the 
     tobacco companies seeking reimbursement for their health care 
     costs of tobacco-related diseases.
       The Coalition believes that the legislation introduced by 
     Senator Kent Conrad and Senator Tom Daschle on behalf of the 
     Senate Democratic Tobacco Task Force is both sound and 
     reasonable. It represents good public health policy, while at 
     the same time protecting the civil justice rights of the 
     multi-employer health & welfare community and others with 
     claims against the tobacco companies.
       We are particularly pleased that the legislation includes 
     an adjustment assistance program for those tobacco workers 
     who might be adversely effected by the legislation, and we 
     encourage the sponsors to further develop this important 
     program. Such assistance for workers is essential in light of 
     the fact that for the past 18 years, the tobacco companies 
     have engaged in a systematic corporate policy to downsize the 
     workforce without assistance for its workers.
       According to the ``Statistical Abstract of the Unite States 
     1997'' the tobacco industry has reduced its total employment 
     by over 40% since 1980; from 69,000 in 1980 to 41,000 in 
     1996. Moreover, the ``Abstract'' projects that by 2005 the 
     industry will have further reduced its U.S. employment to 
     26,000, for an overall reduction since 1980 of 62.4%. 
     Absolutely none of this workforce reduction has been due to a 
     profit decline for the industry since, again according to the 
     ``Abstract'' the annual value of the domestic product has 
     remained constant at about $35 billion. It is also no secret 
     that the U.S. tobacco manufactures have been moving 
     production facilities overseas. All of this occurred long 
     before any ``Tobacco settlement'' was ever negotiated or 
     anticipated. It is the direct result of the same corporate 
     strategy that we have witnessed in industry after industry; 
     from machine tools and electrical equipment to textiles and 
     semi-conductors. In their effort to maximize profits American 
     corporations have closed manufacturing facilities in the U.S. 
     and moved to countries with the lowest wages and least labor 
     protections.

                   Employment in the Tobacco Industry

       In its effort to enact federal legislation to immunize 
     itself from effective legal action, the tobacco industry has 
     engaged in an attempt to economically ``blackmail'' the 
     workers employed in the tobacco industry. The industry has 
     argued that unless the tobacco deal, with immunity, is 
     enacted that it will be forced to shut-down its operations in 
     the United States and move production overseas.
       The fact of the matter is that over the last 18 years, the 
     industry has dramatically reduced employment by 40% and 
     intends to continue this trend in the future.
       The tobacco industry employment figures reproduced below 
     are from the ``Statistical Abstract of the United States 
     1997'', the ultimate source of which is the industry itself.
All Employees--all products:
    1980.........................................................69,000
    1990.........................................................49,000
    1996.........................................................41,000
    2005-(proj.).................................................26,000
Production Employees--all products:
    1980.........................................................54,000
    1990.........................................................36,000
    1996.........................................................31,000
All Employees--cigarettes:
    1980.........................................................46,000
    1990.........................................................35,000
    1996.........................................................28,000
Production Employees--cigarettes:
    1980.........................................................35,000
    1990.........................................................26,000
    1996.........................................................21,000

Notes:
1. These figures were prepared long before the announced ``Tobacco 
Settlement''.
2. Less than half of all tobacco production workers are represented by 
labor unions.
3. The Union sponsored labor-management health & welfare funds which 
have brought suit against the tobacco companies represent 30 million 
union workers, retirees and their families.

Source: Statistical Abstract of the United States, 1997, p. 416 & p. 
425.

  Mr. LAUTENBERG. Mr. President, I want to speak in strong support of 
the HEALTHY Kids Act, which was introduced by Senator Conrad. Senator 
Conrad chaired our tobacco task force, on which I served as vice 
chairman, and I thought, as did most on our side, that he did an 
incredibly thorough job in researching the issues and hearing from the 
various affected parties.
  Mr. President, this bill today reflects the consensus of our task 
force. It is the vision of the Senate Democrats and has cosponsors from 
all sectors of the Democratic Party. Although some of us differ on 
certain specific points, all of us who are cosponsoring this 
legislation agree that this bill contains the right approach to 
tackling the devastating health problems that come from smoking 
cigarettes.
  At the heart of this proposal is a per pack price increase of $1.50. 
This price increase will be phased in over three years and then indexed 
to inflation to maintain a deterrent effect on youth smoking.
  I am particularly pleased, Mr. President, with this aspect of the 
HEALTHY Kids Act because it was adopted from a bill I introduced last 
year, the Public Health and Education Resource Act, which is S. 1343.
  I believe now--as I did then--that if we are serious about reducing 
teen smoking, we have to increase the price swiftly and dramatically. 
It seems to have the most deterrent effect of all measures on youth 
because when the price goes up that far they cannot afford to pick up 
the habit, for which we are grateful.

[[Page S745]]

  This bill also includes much of the bill that Senator Kennedy 
sponsored, and that I had the opportunity to support as a cosponsor, 
again representing the views of several of our Members to be included 
in this consensus package.
  The focus of any tobacco legislation must be on improving the health 
of future generations of Americans, and this bill accomplishes that 
very clearly. In addition to funding various programs that will reduce 
teen smoking and benefit the well-being of children, it provides 
unfettered FDA jurisdiction. As the President has stated many times, 
full FDA power over these deadly products is essential.
  Mr. President, as Ranking Member of the Budget Committee I am also 
pleased that this bill is consistent with the President's budget 
proposal. Both approaches recognize that comprehensive tobacco 
legislation requires a strong investment in America's children. Our 
approach keeps children away from this addictive product, improves 
their health, provides adequate child care and gives them a learning 
environment that fosters health and knowledge and progress.
  That is a real investment in our children, and that is the focus of 
the Healthy Kids Act.
  Mr. President, I often hear that we in Congress cannot pass any 
legislation that the tobacco industry does not first agree to support. 
They speak as if Big Tobacco has some sort of veto right over 
legislation affecting their industry.
  I must tell you. I fail to find in the Constitution of the United 
States--or in any of the Senate rules--any provision that gives them 
the right to veto legislation. The Congress not only has a right--but a 
duty--to rein in on an industry that has been out of control targeting 
our children for addiction and lying about the dangerous nature of 
their products.
  Mr. President, there has also been a great deal of talk about 
providing special protection against liability to this industry. First 
of all, one must question why in the world this industry, which has 
engaged in more corporate misconduct than any other, deserves 
unprecedented special protection from civil liability.
  Secondly, this industry continues to this day to hide from the public 
critical information about tobacco's effect on our health. Congress 
shouldn't even consider limited civil liability protections until we 
have full and absolute disclosure from the companies. It is time for 
them to stop hiding behind false claims of privilege and come clean 
with the American people.
  Mr. President, this bill, the Healthy Kids Act, presents Congress 
with a historic opportunity. I welcome, very sincerely, my friends from 
the other side of the aisle to cosponsor this bill, to work with us, as 
I know that they want to, to question perhaps the methodology or 
process. But I hope that won't stand in the way. We both want to save 
children's lives. We want to invest in their future. It has to be a 
bipartisan goal. I expect that many of our friends on the Republican 
side will join us at some point.
  Mr. President, as can be expected in any omnibus legislation, some 
Senators will disagree on specific provisions of the bill. In fact, I 
have some reservations about certain provisions of this act, such as 
the secondhand smoke restrictions, which I believe could be tougher. 
But I ask all of my colleagues to keep their eye on the big picture--
reducing tobacco's seductive grip on our kids.
  Their target--it is very clearly understood--is to get 3,000 kids a 
day to start smoking because they know once you start it is hell to try 
and stop. And we don't want to permit them to get a grip on our 
children, on their lives, on their health, or on their habits.
  So, Mr. President, I hope that we will be working together in a 
bipartisan way. We will make this happen if we can possibly do so. And 
I invite all of our colleagues to join us.
  I yield the floor.
  Mr. BINGAMAN. Mr. President, it is with great pleasure that I rise 
today to join Senator Conrad and my other colleagues in introducing the 
HEALTHY Kids Act. I want to commend Senator Conrad, and his staff, for 
their excellent work in formulating this legislation. I firmly believe 
that this legislation represents the opportunity to prevent nicotine 
addiction in children and youth.
  The Congress has the truly historic opportunity this year to enact 
comprehensive legislation that will reduce access to and consumption of 
tobacco by our youth. Over the past few months, I have been part of the 
task force that helped consider the numerous issues involved in 
developing a comprehensive approach to address the public health issues 
that surround youth and tobacco. The HEALTHY Kids Act gives us a 
blueprint for reducing the terrible destruction that tobacco products 
have caused.
  The Senate has a compelling interest to address the various issues 
raised by the tobacco settlement. The Office on Smoking and Health at 
the Centers for Disease Control and Prevention has determined that 
cigarettes kill more Americans that AIDS, alcohol, car accidents, 
murders, suicides, drugs, and fires combined.
  Additionally, As the smoke screen erected by the tobacco companies 
begins to clear through numerous court proceedings, we now know what we 
have suspected all along: The targeting of our children has been a well 
planned, well orchestrated, and well financed conspiracy by these 
companies.
  We have all seen the statistics. The Institute of Medicine finds that 
despite the market decline in adult smoking and the social disapproval 
of smoking, an estimated 3,000 young people become regular smokers 
every day. In my home state of New Mexico, roughly 33% of our youth in 
grades 9 through 12, smoke. Indeed, Mr. President, nationally, the 
prevalence of smoking by youth, has remained basically unchanged since 
1980. If current tobacco use patterns in this nation persist, five 
million children currently alive today will die prematurely from a 
smoking related disease.
  It is worth noting that lung cancer remains the leading cause of 
cancer death in the United States. All cancers caused by cigarette 
smoking can be prevented. Instead, according to CDC and Robert Wood 
Johnson, 170,000 Americans will lose their lives to tobacco related 
cancer this year. Preventing and reducing cigarette smoking are key to 
reducing illness and death. We must act now.
  There will be myriad reasons put forth as to why we cannot or should 
not enact this legislation. There will be some who will say that 
Congress should not act at all. We have the opportunity and the 
obligation to enact legislation that will address the public health 
problems caused by tobacco products. The HEALTHY Kids Act gives us the 
chance to begin reversing the damage that has been done. It provides 
the vehicle for leadership that will be necessary to save our children. 
I hope that we will move, and move quickly without any more excuses, to 
enact this legislation.
  Mr. KERREY. Mr. President, I am proud today to join with several of 
my colleagues in support of S. 1638, ``The Healthy Kids Act'', the 
tobacco bill crafted by Senator Conrad and the Democratic Tobacco Task 
Force.
  As you have heard many of our colleagues say, 3000 kids start smoking 
every day. One third of those will prematurely die from a tobacco-
related disease. In Nebraska alone, 38 out of 100 high school kids 
currently smoke cigarettes and over 35,000 kids currently under the age 
of 18 will die prematurely from tobacco-related diseases.
  This is simply unacceptable. And the job has fallen upon Congress to 
do something about it. Last summer, my colleagues and I were faced with 
the daunting task of putting together comprehensive tobacco 
legislation. Led by my very dedicated colleague Senator Conrad from 
North Dakota, the Democratic Tobacco Task Force worked hard for nearly 
eight months to draft a bill that put our children's health first. This 
is exactly what The HEALTHY Kids Act does.
  This bill puts the law on the side of our kids. Sometimes we pass 
laws and are unsure of their impact. This time we can be certain: If we 
pass this law it will save children's lives. Period.
  Experts say that the way to get kids to quit smoking is to raise 
prices on cigarettes. The HEALTHY Kids Act does this.
  This bill is projected to collect $78 billion in total revenue over 
the next five years. Among other things, this money will help improve 
our children's

[[Page S746]]

health care, child care, and education; fund important medical 
research; take care of the farmers that were left out of the settlement 
negotiations; and some money will even go towards reducing the deficit 
and saving social security--which could perhaps be the greatest gift we 
could ever think about giving our children.
  Mr. President, I close by saying that I look forward to working with 
Mr. Conrad and others on passing this important legislation that 
correctly puts our children first.
                                 ______
                                 
      By Mr. COVERDELL:
  S. 1639. A bill to amend the Emergency Planning and Community Right-
To-Know Act of 1986 to cover Federal facilities; to the Committee on 
Environment and Public Works.


       the federal facilities community right-to-know act of 1998

  Mr. COVERDELL. Mr. President, I rise today to introduce legislation--
The Federal Facilities Community Right-To-Know Act of 1998--which 
provides that the federal government is held to the same reporting 
requirements under the Emergency Planning and Community Right-To-Know 
Act (EPCRA) of 1986 as private entities. In 1986, Congress directed the 
Environmental Protection Agency (EPA) to establish a national inventory 
to inform the public about chemicals used and released in their 
communities. Since enactment of the Emergency Planning and Community 
Right-To-Know Act, manufacturers have been required to keep extensive 
records on how they use and store hazardous chemicals and report 
releases of hundreds of hazardous chemicals annually. EPA compiles the 
reported information into the Toxic Release Inventory (TRI).
  The Toxic Release Inventory is a publicly available data base 
containing specific chemical release and transfer information from 
manufacturing facilities throughout the United States. The TRI is 
intended to promote planning for chemical emergencies and to provide 
information to the public regarding the presence and release of toxic 
and hazardous chemicals in their communities.
  In August 1993, President Clinton signed Executive Order 12856, which 
required Federal facilities to begin submitting TRI reports beginning 
in calendar year 1994 activities. I commend President Clinton for 
taking this action. However, this executive order does not have the 
force of law and could be changed by a future Administration. The 
National Governors Association's policy on federal facilities states 
that ``Congress should ensure that federal and state ``right to know'' 
requirements apply to federal facilities.'' My legislation simply 
amends the Emergency Planning and Community Right-To-Know Act to cover 
federal facilities. It is important for the Federal government to 
protect the environment and its citizens from hazardous substances. 
People living near federal facilities have the right to know what 
hazardous substances are being released into the environment by these 
facilities so they can better protect themselves and their children 
from these potential threats. It is my strong belief that federal 
facilities should be treated the same as private entities. My 
legislation attempts to moves us closer towards that goal.
                                 ______
                                 
      By Mr. WELLSTONE (for himself and Mr. Grams):
  S. 1640. A bill to designate the building of the United States Postal 
Service located at East Kellogg Boulevard in Saint Paul, Minnesota, as 
the ``Eugene J. McCarthy Post Office Building''; to the Committee on 
Governmental Affairs.


  THE EUGENE J. McCARTHY POST OFFICE BUILDING DESIGNATION ACT OF 1998

  Mr. WELLSTONE. Mr. President, I rise today on behalf of myself and my 
colleague from Minnesota, Senator Grams, to introduce legislation which 
would designate the U.S. Post Office Building in downtown St. Paul, MN, 
as the ``Eugene J. McCarthy Post Office Building.'' In doing so, we 
join the entire Minnesota delegation in the U.S. House of 
Representatives in honoring a man who is of great importance to our 
state and our nation.
  This building, which will bear the name of one of Minnesota's great 
statesmen, stands in Minnesota's capitol, a city represented by Senator 
McCarthy in the House and Senate for nearly a quarter of a century. 
When the 4th district, and later all of Minnesota, sent Senator 
McCarthy to Washington they sent a scholar as well as a legislator, and 
his service to our state and this nation has not been restricted to his 
tenure in Congress. He has touched lives as a teacher and author as 
well.
  Mr. President, I am proud to know Eugene McCarthy and to follow in 
his footsteps as a Senator from Minnesota, as a progressive, and as a 
great believer in grassroots democracy. He is a person who not only 
articulated, but exercised, a politics of inclusion and who knows that 
a candidate's success is best built upon a foundation of individuals. 
While America has had many important leaders, very few have fought the 
battles Senator McCarthy has fought, very few have shown the commitment 
he has shown to effecting positive change for ordinary people, and very 
few can match his record as a man of peace.
  Mr. President, it is an honor to extend my state's, and my country's, 
gratitude to Senator McCarthy with this designation.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1640

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

     SECTION 1. DESIGNATION.

       (a) In General.--The building of the United States Postal 
     Service located at 180 East Kellogg Boulevard in Saint Paul, 
     Minnesota, shall be known and designated as the ``Eugene J. 
     McCarthy Post Office Building''.
       (b) References.--Any reference in a law, map, regulation, 
     document, paper, or other record of the United States to the 
     building referred to in subsection (a) shall be deemed to be 
     a reference to the ``Eugene J. McCarthy Post Office 
     Building''.
                                 ______
                                 
      By Mr. MOYNIHAN (for himself and Mr. D'Amato):
  S. 1641. A bill to direct the Secretary of the Interior to study 
alternatives for establishing a national historic trail to commemorate 
and interpret the history of women's rights in the United States; to 
the Committee on Energy and Natural Resources.


             THE WOMEN'S RIGHTS NATIONAL HISTORIC TRAIL ACT

  Mr. MOYNIHAN. Mr. President, 1848 was one of the busiest years of the 
19th Century in Europe. Everywhere kings were abdicating, ministers 
fleeing, mobs roving. In London, Karl Marx and Frederich Engels 
composed a pamphlet entitled Manifesto of the Communist Party. 
Revolution was all the rage. But the real revolution was taking place 
in a small brick chapel in a village in upstate New York where people 
had begun to think of a revolution unlike anything known--equal rights 
for women.
  The American movement for women's rights began in Waterloo, New York 
nearly 150 years ago when five women met at the home of Jane and 
Richard Hunt. There, Elizabeth Cady Stanton of Seneca Falls, Mary Ann 
McClintock of Waterloo, Marta Coffin Wright of nearby Auburn, Lucretia 
Coffin Mott of Philadelphia and Mrs. Hunt planned the first women's 
rights convention held at the Wesleyan Chapel in Seneca Falls. It was 
also there that they wrote the ``Declaration of Sentiments,'' a 
document which can certainly be regarded as the Magna Carta of the 
women's movement. Modeled on our Declaration of Independence, the 
``Declaration of Sentiments'' proclaimed that:

       All men and women are created equal: That they are endowed 
     by their Creator with certain inalienable rights; that among 
     these are life, liberty and the pursuit of happiness.

  This unprecedented declaration called for broad societal changes 
aimed at eliminating discriminatory restrictions on women in all their 
spheres of life. A woman's right to a higher education, the right to 
own property and the right to retain her own wages--all these and more 
were proclaimed in this landmark document endorsed at the Seneca Falls 
Convention on July 19 and 20, 1848.
  Perhaps most importantly, the convention was the catalyst for the 
19th Amendment. There, Elizabeth Cady

[[Page S747]]

Stanton made what was at the time a most radical proposal. She called 
for extending the franchise to women.
  Ameila Bloomer, publisher of Lily, the first prominent women's rights 
newsletter, eloquently defended Stanton's call and articulated the 
importance of the vote:

       In this country there is one great tribunal by which all 
     theories must be tried, all principles tested, all measures 
     settled: and that tribunal is the ballot box. It is the 
     medium through which public opinion finally makes itself 
     heard. Deny to any class in the community the right to be 
     heard at the ballot-box and that class sinks at once into a 
     state of slavish dependence, of civil insignificance, which 
     nothing can save from becoming subjugation, oppression and 
     wrong.

  It was fully 72 years before the Nation heeded their call for the 
vote for women.
  It took but 10 months in 1980, however, to establish a Women's Rights 
Historic Park at Seneca Falls and Waterloo, commemorating this call. 
Then-Senator Javits and I proposed a bill that created an historic park 
within Seneca Falls to commemorate the early beginnings of the women's 
movement and to recognize the important role Seneca Falls has played in 
the movement. The park consists of five sites: the 1840's Greek Revival 
home of Elizabeth Cady Stanton, organizer and leader of the women's 
rights movement; the Wesleyan Chapel, where the First Women's Rights 
Convention was held; Declaration Park with a 100 foot waterwall 
engraved with the Declaration of Sentiments and the names of the 
signers of Declaration; and the M'Clintock house, home of MaryAnn and 
Thomas M'Clintock, where the Declaration was drafted.
  On June 27 last, my friend and colleague, Senator D'Amato and I 
introduced S. Con. Res. 35, a resolution that urges the United States 
Postal Service to issue a commemorative postage stamp to celebrate the 
150th anniversary of the Women's Rights Convention. It is only fitting 
that a stamp be issued commemorating this historic anniversary and 
highlighting the importance of continuing this struggle for equal 
rights and opportunity for women in areas such as health care, 
education, employment, and pay equity.
  Today Senator D'Amato and I, in concert with Representative Louise M. 
Slaughter of Rochester, introduce legislation which would direct the 
Secretary of the Interior to study the development of a Women's Rights 
Historic Trail stretching from Boston, Massachusetts to Buffalo, New 
York.
  Mr. President, the contributions made by women in that region are 
many. This is hallowed ground that needs to be celebrated. It would 
include such sites as the Susan B. Anthony House and voting place in 
Rochester; the Women's Rights National Historical Park; the National 
Women's Hall of Fame and the Elizabeth Cady Stanton House in Seneca 
Falls; the Harriet Tubman House and memorial in Auburn; and the Eleanor 
Roosevelt home in Hyde Park.
  The women of Seneca Falls challenged America to social revolution 
with a list of demands that touched upon every aspect of life. Testing 
different approaches, the early women's rights leaders came to view the 
ballot as the best way to challenge the system, but they did not limit 
their efforts to this one issue. Fifty years after the convention, 
women could claim property rights, employment and educational 
opportunities, divorce and child custody laws, and increased social 
freedoms. By the early 20th century, a coalition of suffragists, 
temperance groups, reform-minded politicians, and women's social 
welfare organizations mustered a successful push for the vote.
  Today Congress honors Lucretia Mott and Elizabeth Cady Stanton, along 
with Susan B. Anthony, as revolutionary leaders of the women's movement 
by placing a statue of them in the Capitol Rotunda next to statues of 
other leaders in our Nation's history such as George Washington, 
Abraham Lincoln, and Martin Luther King, Jr.
  An historic trail would be a living monument to women's history, 
bringing to life the numerous pioneers so often left out of our 
textbooks. In ``The Ladies of Seneca Falls: The Birth of the Women's 
Rights Movement'', Miriam Gurko writes:

       Most histories contain, if anything, only the briefest 
     allusion to the woman's rights movement in the nineteenth 
     century--perhaps no more than a sentence to include it in the 
     general upsurge of reform. Here and there the name of a 
     woman's rights leader might be mentioned, generally that of 
     Susan B. Anthony, sometimes Elizabeth Cady Stanton. The rest 
     might never have existed so far as the general run of 
     historical sources is concerned.

  One of the most important social forces of our time is women's 
struggle to achieve equality, and, as such, it is incumbent upon us to 
pay tribute to its many heroes.
  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. 1641

       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 ``Women's Rights National 
     Historic Trail Act of 1998''.

     SEC. 2. STUDY OF ALTERNATIVES FOR NATIONAL HISTORIC TRAIL TO 
                   COMMEMORATE AND INTERPRET HISTORY OF WOMEN'S 
                   RIGHTS IN THE UNITED STATES.

       (a) In General.--The Secretary of the Interior, acting 
     through the Director of the National Park Service (referred 
     to in this section as the ``Secretary''), shall conduct a 
     study of alternatives for establishing a national historic 
     trail commemorating and interpreting the history of women's 
     rights in the United States.
       (b) Matters To Be Considered.--The study under subsection 
     (a) shall include--
       (1) consideration of the establishment of a new unit of the 
     National Park System;
       (2) consideration of the establishment of various 
     appropriate designations for routes and sites relating to the 
     history of women's rights in the United States, and 
     alternative means to link those sites, including a corridor 
     between Buffalo, New York, and Boston, Massachusetts;
       (3) recommendations for cooperative arrangements with State 
     and local governments, local historical organizations, and 
     other entities; and
       (4) cost estimates for the alternatives.
       (c) Study Process.--The Secretary shall--
       (1) conduct the study with public involvement and in 
     consultation with State and local officials, scholarly and 
     other interested organizations, and individuals;
       (2) complete the study as expeditiously as practicable 
     after the date on which funds are made available for the 
     study; and
       (3) on completion of the study, submit to the Committee on 
     Resources of the House of Representatives and the Committee 
     on Energy and Natural Resources of the Senate a report on the 
     findings and recommendations of the study.
                                 ______
                                 
      By Mr. GLENN (for himself, Mr. Thompson, Mr. Levin, Mr. 
        Lieberman, and Mr. Akaka):
  S. 1642. A bill to improve the effectiveness and performance of 
Federal financial assistance programs, simplify Federal financial 
assistance application and reporting requirements, and improve the 
delivery of services to the public; to the Committee on Governmental 
Affairs.


      the federal financial assistance management improvement act

  Mr. GLENN. Mr. President, I rise today to introduce the Federal 
Financial Assistance Management Improvement Act of 1998--legislation 
designed to improve the efficiency and effectiveness of Federal 
financial assistance and grant-in-aid programs.
  According to the Advisory Commission on Intergovernmental Relations, 
there are over 600 different Federal grant programs to state and local 
governments and other service providers. Not only is that a large 
number of programs in the aggregate, we also have an abundance of 
separate grant programs even in areas where only one general purpose is 
being served. For example, in the budget subfunction of social services 
alone, there are over 80 different Federal grant programs. In 
elementary and secondary education, there are a similar number of 
Federal programs.
  Almost all of these different grant programs serve worthy goals and 
purposes. However, they inevitably carry with them separate redtape, 
regulations, and procedures that frustrate those at the state, local 
and nonprofit level who must coordinate the services and carry out the 
responsibilities in all these separate programs. Furthermore, in many 
of these grant programs, ``getting out the money'' is the primary 
emphasis. Administrative performance and efficiency are a secondary 
emphasis, or in some cases not emphasized at all, so we have little 
understanding at any level of government how well the

[[Page S748]]

programs are actually working. Part of this problem stems from the fact 
that the money passes through 3 sometimes 4 different sets of hands 
before it reaches its intended beneficiaries. So it's hard to know 
where responsibility lies when it comes to making sure that the money 
is spent efficiently, properly and in a way to maximize the goals and 
objectives of the underlying program.
  We've been working for several years in the Governmental Affairs 
Committee on ways to cut Federal redtape while improving performance. 
We tried to reduce Federal burdens with enactment of the Paperwork 
Reduction Act and Unfunded Mandates Reform Act, while strengthening the 
effectiveness of Federal programs with the Government Performance 
Results Act.
  This bill builds on those initiatives. It requires that Federal 
agencies develop plans that, among other things: establish uniform 
applications for related grant programs; develop common rules for 
Federal requirements that cut across multiple grant programs; and, 
emphasize use of electronic reporting via the Internet. Agencies would 
have 18 months to develop their plans, with OMB overseeing their 
development. They would work closely with state and local governments 
and the nonprofit community in the setting of performance measures to 
achieve the bill's goals. The bill sunsets in 5 years following a 
review by the National Academy of Public Administration.
  Americans want government services to work better. But they also want 
government to live within its means, to balance its books. In other 
words, they want more cost-effective government, and that's at all 
levels. I believe this bill helps lead us in that direction. I'm 
pleased that Chairman Thompson, along with Senators Levin, Lieberman, 
and Akaka, have joined me cosponsoring the bill and I look forward to 
considering it in the Governmental Affairs Committee.
  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. 1642

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

     SECTION 1. TITLE.

       This Act may be cited as the ``Federal Financial Assistance 
     Management Improvement Act of 1998''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) there are over 600 different Federal financial 
     assistance programs to implement domestic policy;
       (2) while the assistance described in paragraph (1) has 
     been directed at critical problems, some Federal 
     administrative requirements may be duplicative, burdensome or 
     conflicting, thus impeding cost-effective delivery of 
     services at the local level;
       (3) State, local, and tribal governments and private, 
     nonprofit organizations are dealing with increasingly complex 
     problems that require the delivery and coordination of many 
     kinds of services; and
       (4) streamlining and simplification of Federal financial 
     assistance administrative procedures and reporting 
     requirements will improve the delivery of services to the 
     public.

     SEC. 3. PURPOSES.

       The purposes of this Act are to--
       (1) improve the effectiveness and performance of Federal 
     financial assistance programs;
       (2) simplify Federal financial assistance application and 
     reporting requirements;
       (3) improve the delivery of services to the public; and
       (4) facilitate greater coordination among those responsible 
     for delivering such services.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Common rule.--The term ``common rule'' means a 
     government-wide uniform rule for any generally applicable 
     requirement established to achieve national policy objectives 
     that applies to multiple Federal financial assistance 
     programs across Federal agencies.
       (2) Director.--The term ``Director'' means the Director of 
     the Office of Management and Budget.
       (3) Federal agency.--The term ``Federal agency'' means any 
     agency as defined under section 551(1) of title 5, United 
     States Code.
       (4) Federal financial assistance program.--The term 
     ``Federal financial assistance program'' means a domestic 
     assistance program (as defined under section 6101(4) of title 
     31, United States Code) under which financial assistance is 
     available, directly or indirectly, to a State, local, or 
     tribal government or a qualified organization to carry out 
     activities consistent with national policy goals.
       (5) Local government.--The term ``local government'' 
     means--
       (A) a political subdivision of a State that is a unit of 
     general local government (as defined under section 6501(10) 
     of title 31, United States Code);
       (B) any combination of political subdivisions described in 
     subparagraph (A); or
       (C) a local educational agency as defined under section 
     14101(18) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 8801(18)).
       (6) Qualified organization.--The term ``qualified 
     organization'' means a private, nonprofit organization 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986 that is exempt from taxation under section 501(a) of 
     the Internal Revenue Code of 1986.
       (7) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, Puerto Rico, American Samoa, Guam, 
     and the Virgin Islands.
       (8) Tribal government.--The term ``tribal government'' 
     means the governing entity of an Indian tribe, as that term 
     is defined in the Indian Self Determination and Education 
     Assistance Act (25 U.S.C. 450b).

     SEC. 5. DUTIES OF THE DIRECTOR.

       (a) In General.--The Director, in consultation with agency 
     heads, shall direct, coordinate, and assist Federal agencies 
     in establishing--
       (1) a uniform application, or set of uniform applications, 
     to be used by an applicant to apply for assistance from 
     multiple Federal financial assistance programs that serve 
     similar purposes and are administered by different Federal 
     agencies;
       (2) ways to streamline and simplify Federal financial 
     assistance administrative procedures and reporting 
     requirements for grantees;
       (3) a uniform system wherein an applicant may apply for, 
     manage, and report on the use of, funding from multiple 
     Federal financial assistance programs across different 
     Federal agencies;
       (4) a process for applicants to electronically apply for, 
     and report on the use of, funds from Federal financial 
     assistance programs;
       (5) use of common rules for multiple Federal financial 
     assistance programs across different Federal agencies;
       (6) improved interagency and intergovernmental coordination 
     of information collection and sharing of data pertaining to 
     Federal financial assistance programs, including the 
     development of a release form to be used by grantees to 
     facilitate the sharing of information across multiple Federal 
     financial assistance programs;
       (7) a process to strengthen the information resources 
     management capacity of State, local, and tribal governments 
     and qualified organizations pertaining to the administration 
     of Federal financial assistance programs; and
       (8) specific annual goals and objectives to further the 
     purposes of this Act.
       (b) Actions Consistent With Statutory Requirements.--The 
     actions taken by the Director under subsection (a) shall be 
     consistent with statutory requirements relating to any 
     applicable Federal financial assistance program.
       (c) Lead Agency and Working Groups.--The Director may 
     designate a lead agency to assist the Director in carrying 
     out the responsibilities under this section. The Director may 
     use interagency working groups to assist in carrying out such 
     responsibilities.
       (d) Review of Plans and Reports.--
       (1) In general.--The Director shall--
       (A) review agency plans and reports developed under section 
     6 for adequacy;
       (B) monitor the annual performance of each agency toward 
     achieving the goals and objectives stated in the agency plan; 
     and
       (C) ensure that each agency plan does not diminish 
     standards to measure performance and accountability of 
     financial assistance programs.
       (2) Report.--Not later than 3 years after the date of 
     enactment of this Act, the Director shall report to Congress 
     on implementation of this section. Such a report may be 
     included as part of any of the general management reports 
     required under law.
       (e) Exemptions.--
       (1) In general.--The Director may exempt any Federal agency 
     from the requirements of this Act if the Director determines 
     that the agency does not have a significant number of Federal 
     financial assistance programs.
       (2) Agencies exempted.--Not later than November 1 of each 
     fiscal year, the Director shall submit to the Committee on 
     Governmental Affairs of the Senate and the Committee on 
     Government Reform and Oversight of the House of 
     Representatives--
       (A) a list of each agency exempted under this subsection in 
     the preceding fiscal year; and
       (B) an explanation for each such exemption.
       (f) Guidance.--Not later than 120 days after the date of 
     enactment of this Act, the Director shall issue guidance to 
     Federal agencies on implementation of the requirements of 
     this Act. Such guidance shall include a statement on the 
     common rules that the Director intends to review and 
     standardize under this Act.

     SEC. 6. DUTIES OF FEDERAL AGENCIES.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, each Federal agency shall develop and 
     implement a plan that--
       (1) streamlines and simplifies the application, 
     administrative, and reporting procedures for each financial 
     assistance program administered by the agency;

[[Page S749]]

       (2) demonstrates active participation in the interagency 
     process required the applicable provisions of section 5(a);
       (3) demonstrates agency use, or plans for use, of the 
     uniform application (or set of applications) and system 
     developed under section 5(a) (1) and (3);
       (4) designates a lead agency official for carrying out the 
     responsibilities of the agency under this Act;
       (5) allows applicants to electronically apply for, and 
     report on the use of, funds from the Federal financial 
     assistance program administered by the agency;
       (6) strengthens the information resources management 
     capacity of State, local and tribal governments and qualified 
     organizations pertaining to the administration of the 
     financial assistance program administered by the agency; and
       (7) in cooperation with State, local, and tribal 
     governments and qualified organizations, establishes specific 
     annual goals and objectives to further the purposes of this 
     Act and measure annual performance in achieving those goals 
     and objectives.
       (b) Plan Consistent With Statutory Requirements.--Each plan 
     developed and implemented under this section shall be 
     consistent with statutory requirements relating to any 
     applicable Federal financial assistance program.
       (c) Comment and Consultation on Agency Plans.--
       (1) Comment.--Each Federal agency shall publish the plan 
     developed under subsection (a) in the Federal Register and 
     shall receive public comment on the plan through the Federal 
     Register and other means (including electronic means). To the 
     maximum extent practicable, each Federal agency shall hold 
     public hearings or related public forums on the plan.
       (2) Consultation.--The lead official designated under 
     subsection (a)(4) shall consult regularly with 
     representatives of State, local and tribal governments and 
     qualified organizations during development of the plan. 
     Consultation with representatives of State, local, and tribal 
     governments shall be in accordance with section 204 of the 
     Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1534).
       (d) Submission of Plan.--Each Federal agency shall submit 
     the plan developed under subsection (a) to the Director and 
     Congress and report annually thereafter on the implementation 
     of the plan and performance of the agency in meeting the 
     goals and objectives specified under subsection (a)(7). Such 
     a report may be included as part of any of the general 
     management reports required under law.

     SEC. 7. EVALUATION.

       (a) In General.--The Director (or the lead agency 
     designated under section 5(c)) shall contract with the 
     National Academy of Public Administration to evaluate the 
     effectiveness of this Act. Not later than 4 years after the 
     date of enactment of this Act the evaluation shall be 
     submitted to the lead agency, the Director, and Congress.
       (b) Contents.--The evaluation under subsection (a) shall--
       (1) assess the effectiveness of this Act in meeting the 
     purposes of this Act and make specific recommendations to 
     further the implementation of this Act;
       (2) evaluate actual performance of each agency in achieving 
     the goals and objectives stated in agency plans; and
       (3) assess the level of coordination and cooperation among 
     the Director, Federal agencies, State, local, and tribal 
     governments, and qualified organizations in implementing this 
     Act.

     SEC. 8. EFFECTIVE DATE AND SUNSET.

       This Act shall take effect on the date of enactment of this 
     Act and shall cease to be effective on and after 5 years 
     after such date of enactment.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Mr. Jeffords, Mr. Kerry, and Mr. 
        Leahy):
  S. 1643. A bill to amend title XVIII of the Social Security Act to 
delay for one year implementation of the per beneficiary limits under 
the interim payment system to home health agencies and to provide for a 
later base year for the purposes of calculating new payment rates under 
the system; to the Committee on Finance.


               medicare and home health care legislation

  Mr. KENNEDY. Mr. President, the home health benefit available under 
Medicare plays a significant role in allowing elderly beneficiaries to 
remain in their homes and in their community. Those who use the home 
health benefit are among the most vulnerable Medicare beneficiaries. 
More than 40 percent have incomes below $10,000. One in three live 
alone, and two-thirds are over age 75.

  In recent years, the cost of the home health benefit has been one of 
the fastest growing parts of Medicare. While the vast majority of this 
growth is attributable to a legitimate increase in home health care as 
patients are moved out of the hospital more quickly, some portion is 
known to be due to fraud. As a result, Congress enacted provisions on 
this spending as a part of the Balanced Budget Act of 1997. 
Unfortunately, it now appears that some of the restrictions will 
operate in a way that penalizes providers unfairly and jeopardizes 
their ability to continue to offer these vital services for the 
elderly.
  In order to address these issues, I am introducing legislation to 
delay the effective date of one provision, and to change the base year 
that will be used to calculate future home health payments. Congressman 
McGovern is introducing similar legislation in the House of 
Representatives.
  The problem with the current law is especially serious in New 
England. Home health agencies throughout the region generally provide 
care for less cost than the national average. For example, the average 
Medicare payment per home health visit in Massachusetts in 1995 was 19 
percent below the national average. These programs are effective. They 
provide high quality home health care and help people to remain in the 
community and out of hospitals and nursing homes. And they do so in a 
cost-efficient manner. Nevertheless, the Home & Health Care Association 
of Massachusetts estimates that the provisions of the Balanced Budget 
Act of 1997 could result in a loss of 1.5 million home health visits--a 
20 percent reduction--this year. Under the Act, Massachusetts and other 
states that provide high quality care efficiently and at lower rates 
are at a disadvantage, whereas inefficient providers are permitted to 
lock in higher rates.
  One of the most questionable effects of the Act requires home health 
agencies to comply with ``per beneficiary caps'' before the federal 
government tells them what the caps are. The bill I am introducing 
delays the effective date of the caps until October 1, 1998, to allow 
time for agencies to adjust to forthcoming, essential guidance from the 
Health Care Financing Administration.
  In addition, this bill moves up the year--from 1994 to 1995--that 
will be used to calculate payments for 1998 and beyond. This change 
means that payments will more accurately reflect the type of home care 
that is currently delivered.
  The problem facing home health patients and agencies is substantial. 
Congress should address this issue now, before home health agencies 
that provide needed services are unfairly forced out of business, and 
before senior citizens are forced to go without necessary care or leave 
their homes for more expensive hospital care or nursing home care. The 
provisions of the Balanced Budget Act should be modified to avoid these 
unfortunate and unnecessary problems.
  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. 1643

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

     SECTION 1. DELAY OF PER BENEFICIARY LIMITS UNDER INTERIM 
                   PAYMENT SYSTEM AND CHANGE OF BASE YEAR.

       (a) Delay in Per Beneficiary Limits Under Interim Payment 
     System.--
       (1) In general.--Section 1861(v)(1)(L) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(L)), as amended by 
     section 4602 of the Balanced Budget Act of 1997, is amended 
     in clauses (v) and (vi) by striking ``October 1, 1997,'' each 
     place it appears and inserting ``October 1, 1998,''.
       (2) Conforming amendments.--Section 1861(v)(1)(L)(vii) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(vii)), as 
     added by section 4602(c) of the Balanced Budget Act of 1997, 
     is amended--
       (A) by striking ``April 1, 1998,'' and inserting ``August 
     1, 1998,''; and
       (B) by striking ``fiscal year 1998'' and inserting ``fiscal 
     year 1999''.
       (b) Change in Base Year.--Section 1861(v)(1)(L)(v)(I) of 
     the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(v)(I)) is 
     amended by striking ``ending during fiscal year 1994'' each 
     place it appears and inserting ``ending during fiscal year 
     1995 or, at the election of the agency, calendar year 1995''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall apply as if included in the enactment of the 
     Balanced Budget Act of 1997.

  Mr. JEFFORDS. Mr. President, today, I am introducing legislation with 
my colleague Senator Kennedy that will improve the implementation of 
the interim payment system to home health agencies established under 
the Balanced Budget Act of 1997. It is imperative that we protect 
access

[[Page S750]]

to care for our most vulnerable populations--the elderly and the 
disabled. While I support the move to a prospective payment system for 
home care under the Balanced Budget Act, the payment system designed 
for the interim period is proving to be an intolerable burden for the 
home health agencies that serve Vermont's Medicare beneficiaries.
  This bill would do two things to remove the current threat to quality 
home care. First, the bill delays the implementation of the interim 
payment system for one year. This will minimize its impact on agencies 
as a prospective payment system is put in place. Second, the base year 
for establishing per patient limits will shift from the current 
designation of fiscal year 1994, to either fiscal or calendar year 
1995. Care rendered in 1995 is a better reflection of the current mix 
of patients--and it captures the deterrent effect of Operation Restore 
Trust on fraud and abuse in areas where cost was inflated.
  My own State of Vermont is a good example of how the health care 
system can work to provide for high quality care for Medicare 
beneficiaries. Home health agencies are a critical link in the kind of 
health system that extends care over a continuum of options and 
settings. New technology and advances in medical practice permit 
hospitals to discharge patients earlier. They give persons suffering 
with acute or chronic illness the opportunity to receive care and live 
their lives in familiar surroundings. Time and time again, Vermont's 
home health agencies have proven their value by providing quality, 
cost-effective services to these patients. Yet time and again, federal 
policy seems to ensure that their good deeds should go punished.
  Furthermore, Vermont home health agencies have been able to provide 
quality service while consistently maintaining the lowest per capital 
reimbursement rates for home care in the country. The average Medicare 
payment per patient in Vermont is approximately $3,000 per year, one 
third lower than the national average, and far less than in high costs 
states where payments rise as high as $7,900 per patient per year. Now, 
Vermont agencies face a interim payment system established under the 
Balanced Budget Act of 1997 that is based on historical cost. Instead 
of being rewarded for their good work, Vermont agencies will have a 
much lower per patient limit under Medicare than agencies in high cost 
areas. According to a January 7 article in the Wall Street Journal, 
Vermont's 13 agencies could lose over $2 million next year by 
continuing to do what they always have done--providing efficient and 
essential services.
  Since the impact of the interim payment system became apparent, I 
have been in continuous contact with the Vermont Assembly of Home 
Health Agencies; the Vermont Agency of Human Services; and directors, 
trustees, employees, and patients of nearly every home health agency in 
the state. I firmly believe we must act to guard the health and welfare 
of a particularly vulnerable segment of the population. This 
legislation will help ensure that our home health care infrastructure 
is able to continue serving the patients that rely upon them.
                                 ______
                                 
      By Mr. REED (for himself, Ms. Collins, Mr. Kennedy, Mrs. Murray, 
        Mr. Dodd, Ms. Mikulski, Mr. Conrad, Mr. Akaka, Mr. Levin, Mr. 
        Kerry, Mr. Johnson, Mr. Torricelli, Mr. Kerrey, and Mr. 
        Hollings):
  S. 1644. A bill to amend subpart 4 of part A of title IV of the 
Higher Education Act of 1965 regarding Grants to States for State 
Student Incentives; to the Committee on Labor and Human Resources.


         the leveraging educational assistance partnership act

  Mr. REED. Mr. President, I rise to introduce legislation with my 
Republican colleague on the Labor and Human Resources Committee, 
Senator Susan Collins, as well as Senators Kennedy, Murray, Dodd, 
Mikulski, Conrad, Levin, Akaka, Kerry, Johnson, Torricelli, Kerrey, and 
Hollings to reform and reauthorize an important student aid program, 
the State Student Incentive Grant program or SSIG.
  Last fall, I was pleased to join forces with Senator Collins to lead 
the fight to restore funding for SSIG on an 84 to 4 vote.
  This program provides funding on the basis of a dollar for dollar 
match to help states provide need-based financial aid in the form of 
grants and community service work study awards to 700,000 students 
nationwide, and 13,000 students from my home state of Rhode Island. 
Grants are targeted to the neediest undergraduate and graduate 
students.
  As I noted last fall during the debate on the Labor, Health and Human 
Services, and Education Appropriations bill, many states would not have 
established or maintained their need-based financial aid programs 
without this important federal incentive. Moreover, students, searching 
for sources of need-based grants to make their higher education dreams 
a reality, have come to rely on SSIG.
  Indeed, the importance of SSIG has increased over the years as 
skyrocketing college costs have eroded the purchasing power of the Pell 
Grant, and as the grant-loan imbalance widens. Twenty-three years ago, 
80 percent of student aid came in the form of grants and 20 percent in 
the form of loans. Today the opposite is true, and students face 
significant debt upon graduation.
  In addition, low-income students are still finding it particularly 
hard to afford higher education. Less than 50% of high school graduates 
with incomes under $22,000 go to college, while more than 80% of their 
higher income counterparts pursue education beyond high school.
  To address these trends and ensure that needy students have 
alternatives to borrowing, SSIG must be strengthened during the 
upcoming reauthorization of the Higher Education Act. The legislation 
we introduce today, the Leveraging Educational Assistance Partnership 
(LEAP) Act, does this by reauthorizing and making significant reforms 
to the SSIG program.
  The LEAP Act provides states greater incentives and flexibility to 
help needy students attend college. Our legislation creates a two-tier 
grant program. Any funds appropriated over a trigger level of funding--
$35 million-- would require an increased state match of two new dollars 
for every federal dollar. However, states would gain new flexibility to 
use these funds for activities such as increasing grant amounts or 
carrying out academic or merit scholarship programs, community service 
programs, early intervention, mentorship, and career education 
programs, secondary to postsecondary education transition programs, or 
scholarship programs for students wishing to enter the teaching 
profession.
  These improvements restore the incentive nature of the program by 
attracting more state funds for student aid and providing greater 
flexibility for the use of these funds, while not disenfranchising 
states that can only match according to the current 1-to-1 requirement.
  The LEAP Act is supported by students, educators, and student aid 
officials, including the National Association of State Student Grant 
and Aid Programs (NASSGAP), the National Association of Independent 
Colleges and Universities (NAICU), the American Council on Education 
(ACE), the American Association of State Colleges and Universities 
(AASCU), the United States Public Interest Research Group (USPIRG), the 
United States Student Association (USSA), and the National Association 
of Graduate-Professional Students.
  Mr. President, I believe we should help all our citizens achieve the 
American Dream and ensure access to higher education, especially for 
hard working families whose wages have not kept up with inflation. I 
urge my colleagues to join us in this critical effort to strengthen 
federal-state student aid partnerships and our commitment to America's 
students.
  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. 1644

         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 ``Leveraging Educational 
     Assistance Partnership Act''.

[[Page S751]]

     SEC. 2. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP 
                   PROGRAM.

       (a) Authorization of Appropriations.--Section 415A(b) of 
     the Higher Education Act of 1965 (20 U.S.C. 1070c(b)) is 
     amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999'';
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Reservation.--For any fiscal year for which the 
     amount appropriated under paragraph (1) exceeds $35,000,000, 
     the excess shall be available to carry out section 415E.''.
       (b) Special Leveraging Educational Assistance Partnership 
     Program.--Subpart 4 of part A of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070c et seq.) is amended--
       (1) by redesignating section 415E as 415F; and
       (2) by inserting after section 415D the following:

     ``SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE 
                   PARTNERSHIP PROGRAM.

       ``(a) In General.--From amounts reserved under section 
     415A(b)(2) for each fiscal year, the Secretary shall--
       ``(1) make allotments among States in the same manner as 
     the Secretary makes allotments among States under section 
     415B; and
       ``(2) award grants to States, from allotments under 
     paragraph (1), to enable the States to pay the Federal share 
     of the cost of the authorized activities described in 
     subsection (c).
       ``(b) Applicability Rule.--Except as otherwise provided in 
     this section, the provisions of this subpart which are not 
     inconsistent with this section shall apply to the program 
     authorized by this section.
       ``(c) Authorized Activities.--Each State receiving a grant 
     under this section may use the grant funds for--
       ``(1) increasing the dollar amount of grants awarded under 
     section 415B to eligible students who demonstrate financial 
     need;
       ``(2) carrying out transition programs from secondary 
     school to postsecondary education for eligible students who 
     demonstrate financial need;
       ``(3) carrying out community service programs for eligible 
     students who demonstrate financial need;
       ``(4) creating a scholarship program for eligible students 
     who demonstrate financial need and wish to enter teaching;
       ``(5) carrying out early intervention programs, mentoring 
     programs, and career education programs for eligible students 
     who demonstrate financial need; and
       ``(6) awarding merit or academic scholarships to eligible 
     students who demonstrate financial need.
       ``(d) Maintenance of Effort Requirement.--Each State 
     receiving a grant under this section for a fiscal year shall 
     provide the Secretary an assurance that the aggregate amount 
     expended per student or the aggregate expenditures by the 
     State, from funds derived from non-Federal sources, for the 
     authorized activities described in subsection (c) for the 
     preceding fiscal year were not less than the amount expended 
     per student or the aggregate expenditures by the State for 
     the activities for the second preceding fiscal year. The 
     Secretary may waive this subsection for good cause, as 
     determined by the Secretary.
       ``(e) Federal Share.--The Federal share of the cost of the 
     authorized activities described in subsection (c) for any 
     fiscal year shall be 33\1/3\ percent.''.
       (c) Technical and Conforming Amendments.--
       (1) Purpose.--Subsection (a) of section 415A of the Higher 
     Education Act of 1965 (20 U.S.C. 1070c(a)) is amended to read 
     as follows:
       ``(a) Purpose of Subpart.--It is the purpose of this 
     subpart to make incentive grants available to States to 
     assist States in--
       ``(1) providing grants to--
       ``(A) eligible students attending institutions of higher 
     education or participating in programs of study abroad that 
     are approved for credit by institutions of higher education 
     at which such students are enrolled;
       ``(B) eligible students for campus-based community service 
     work-study; and
       ``(2) carrying out the activities described in section 
     415F.''.
       (2) Allotment.--Section 415B(a)(1) of the Higher Education 
     Act of 1965 (20 U.S.C. 1070c-1(a)(1)) is amended by inserting 
     ``and not reserved under section 415A(b)(2)'' after 
     ``415A(b)(1)''.

  Mr. KERREY. Mr. President, it is with great pleasure that I cosponsor 
this important piece of legislation to help the very neediest of 
individuals obtain a college degree.
  One of the most important goals that we can accomplish as legislators 
is to ensure that every American who is willing to work hard can go to 
college and have a shot at the American Dream. Yet we know that the 
cost of a college education is rising rapidly, and that can be an 
inhibitor for potential students.
  By reauthorizing and reforming State Student Incentive Grants, the 
LEAP Act ensures that this important program continues to assist those 
students who otherwise may not be able to pursue higher education. 
Together with Pell grants they make it possible for low-income students 
to reach their potential and in turn become productive contributors in 
our increasingly knowledge-based economy.
  This legislation restores to the SSIG program its incentive nature by 
giving states a reason to increase their investment in it. Any funds 
appropriated over $35 million would require an increased state match of 
two new dollars for every federal dollar. In return greater flexibility 
will be provided for the use of these extra funds. They can be used to 
increase grant awards or for other worthy activities such as carrying 
out academic or merit scholarship programs or career education 
programs.
  Nebraska has been supportive of the SSIG program and has shown that 
support in its willingness to overmatch the federal contribution. 
However, with the decrease in appropriations from $50 million for 
fiscal year 1997 to $25 million for fiscal year 1998, the state will be 
able to assist approximately 500 fewer students. Seventy-one percent of 
Nebraska students who received an SSIG had a family income of $20,000 
or less.
  By lending further support to the SSIG program we can ensure that 
these 500 students and thousands of students across the nation do not 
fall between the cracks.
  Mr. President, I am cosponsoring this bill today because it 
represents a good bipartisan effort to increase educational 
opportunities for those in greatest need of financial assistance. I 
look forward to moving it through Congress.
                                 ______
                                 
      By Mr. ABRAHAM (for himself, Mr. Lott, Mr. DeWine, Mr. Inhofe, 
        Mr. Nickles, Mr. Coverdell, Mr. Helms, Mr. Coats, Mr. Sessions, 
        Mr. Enzi, Mr. Craig, Mr. Kyl, Mr. Hatch, Mr. Faircloth, Mr. 
        Brownback, Mr. Santorum, Mr. McConnell, Mr. Hutchinson, Mr. 
        Bond, and Mr. Grassley):
  S. 1645. A bill to amend title 18, United States Code, to prohibit 
taking minors across State lines to avoid laws requiring the 
involvement of parents in abortion decisions; to the Committee on the 
Judiciary.


                the child custody protection act of 1998

  Mr. ABRAHAM, Mr. President. I rise today to introduce legislation 
protecting the most important relationship of all: that of parents and 
their children. All of us know that the family is the fundamental, 
crucial and indispensable basis of our civilization. Without strong 
families our children will grow up without role models, without a sound 
knowledge of how they ought to behave and for what they ought to 
strive. As a consequence, the data shows quite clearly that children 
deprived of strong family lives are more likely to suffer from 
depression, substance abuse, crime, violence, poverty and even suicide.
  Yet, when it comes to one of the most important decisions in life, 
Mr. President, children are being kept from the guidance of their 
parents. I am talking, of course, about the decision whether or not to 
have an abortion. The American people recognize how crucial it is for 
minor children to involve their parents in this life-changing decision. 
74 percent of Americans in a 1996 Gallup poll favored requiring minors 
to get parental consent for an abortion. People quite reasonably 
believe that parents should be involved in deciding whether their 
daughter should undergo an abortion. As the Supreme Court noted in H.L. 
v. Matheson, ``the medical, emotional, and psychological consequences 
of an abortion are serious and can be lasting; this is particularly so 
when the patient is immature.''
  Convinced of the soundness of this reasoning, at least 22 states have 
enacted laws requiring consent of or notification to at least one 
parent, or authorization by a judge, before a minor can obtain an 
abortion. Unfortunately, this wise policy is being undermined.
  Thousands of children every year are taken across state lines by 
people other than their parents to secure secret abortions. As we 
speak, Mr. President, abortion providers are taking out large 
advertisements in the Yellow Pages in cities like Harrisburg and 
Scranton, Pennsylvania, trumpeting the fact that their clinics, across 
the Pennsylvania state line, do not require parental notification as 
Pennsylvania

[[Page S752]]

does. In essence, these abortion providers are encouraging people to 
circumvent Pennsylvania's parental notification law by crossing the 
border into New Jersey, New York or Maryland for a secret abortion.
  And thousands of times every year this suggestion is taken up by non-
related adults who want to circumvent the law. One example of this 
conduct made headlines recently. The case involved an 18 year old 
Pennsylvania man who got his 12 year old neighbor pregnant. 
Pennsylvania law requires parental consent prior to an abortion on a 
minor. To circumvent this law, Rosa Hartford, mother of the 18 year 
old, secretly took the girl to an abortion clinic in New York, a state 
with no parental notification requirement. Her actions discovered, Mrs. 
Hartford, whose son pled guilty to two counts of statutory rape, was 
convicted of interfering with the custody of a child.
  The Center for Reproductive Law and Policy (CLRP), a prominent 
proabortion legal defense organization, appealed Mrs. Hartford's 
conviction on the grounds that she merely ``assisted a woman to 
exercise her constitutional rights'' and as such was herself protected 
from prosecution by the Constitution.
  Mr. President, this reasoning cannot stand. To say that, because the 
court in Roe v. Wade declared most abortions constitutionally protected 
during the first trimester, that therefore minors have an absolute 
right to abortion without so much as notifying their parents, and that 
third parties--whatever their motives--have the right to secretly 
transport them across state lines for a secret abortion, is to stand 
constitutional protections on their head. It is to strip children to 
the natural protection of their parents.
  For the sake of our children and our families, this must stop. We 
must uphold the law and uphold the family tie. That is why I am 
introducing the Child Custody Protection Act. This legislation is 
simple and straightforward. It will make it a federal offense to 
transport a minor across state lines with intent to avoid the 
application of a state law requiring parental involvement in a minor's 
abortion, or judicial waiver of such a requirement.
  Children must receive parental consent for even minor surgical 
procedures, Mr. President. The profound, lasting physical and 
psychological effects of abortion demand that we help states guarantee 
parental involvement in the abortion decision. That means, at a 
minimum, seeing to it that outside parties cannot circumvent state 
parental notification and consent laws with impunity.
  America is in the midst of a profound debate over the nature and 
status of abortion. But, even as many of us disagree over a number of 
crucial issues, we all should be able to agree that duly enacted laws 
must be upheld. Those who would undermine these laws in the name of 
unfettered abortion on demand damage the rule of law by subverting 
legitimate statutes. They also undercut our Constitutional liberties by 
stretching them beyond all rational bounds and using them to sap 
parental rights and family ties.
  We can no more afford to allow state laws to be flouted than we can 
afford to allow family ties to be further undermined. For the sake of 
our families and our rule of law, I urge my colleagues to defend both 
by supporting the Child Custody Protection Act.
  Mr. DeWINE. Mr. President, today I rise as a cosponsor of the Child 
Custody Protection Act sponsored by my colleague, Senator Spencer 
Abraham, to whom I am grateful for introducing this important 
legislation. The purpose of this legislation is to make it a crime to 
transport a child across state lines if this circumvents state law 
requiring parental involvement or a judicial waiver for a minor to 
obtain an abortion.
  In a well-publicized case in Pennsylvania, a 12-year-old girl became 
pregnant after a sexual relationship with an 18-year-old man. As 
parental consent is required under Pennsylvania law before a minor can 
receive an abortion, the man's mother took the pregnant girl to New 
York for an abortion, where there is no such parental involvement law. 
The baby was aborted. The girl's mother did not consent to her daughter 
having an abortion; in fact, she did not even know her daughter was 
pregnant. Unfortunately, parents and guardians have no clear recourse 
when another adult circumvents the law of the state where the parent 
and child live by transporting a child to another state.
  Twenty-two states have laws that require either notification or 
consent of a parent before a minor child receives an abortion. 
Currently, in my State of Ohio, a parent or guardian must be notified 
before a child receives an abortion. However, the State Legislature has 
recently passed a law requiring both parental consent and a face-to-
face meeting with the doctor performing the abortion at least twenty-
four hours before the procedure. Clearly, the citizens of Ohio have a 
compelling interest in making sure that parents are involved in a 
minor's decision to have an abortion, and that women have a full 
opportunity to consider the medical implications of their decision to 
abort an unborn child.
  The right of citizens to pass and enforce laws regarding the rights 
of parents is completely abrogated by the ability of strangers to 
surreptitiously transport children to another state to obtain a 
surgical or drug-induced abortion. By introducing this bill, we are 
sending a clear message that Roe v. Wade does not confer a ``right'' on 
strangers to take one's minor daughter across state lines to obtain an 
abortion when the involvement of a parent or a court is required. In 
H.L. v. Matheson, the Supreme Court correctly stated, ``the medical, 
emotional, and psychological consequences of an abortion are serious 
and can be lasting; this is particularly so when the patient is 
immature.''
  In my view that strangers should be barred from circumventing the 
rights of parents to be involved in life and death decisions faced by 
their children. I believe the vast majority of Americans will never 
want to relegate the well-being of our children to a situation where 
life-altering decisions are made without the guidance and support of 
caring parents.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. Torricelli, and Mr. Bumpers):
  S. 1646. A bill to repeal a provision of law preventing donation by 
the Secretary of the Navy of the two remaining Iowa-class battleships 
listed on the Naval Vessel Register and related requirements; to the 
Committee on Armed Services.


                THE HISTORIC BATTLESHIP PRESERVATION ACT

  Mr. LAUTENBERG. Mr. President, I rise to introduce legislation to 
repeal a 1996 law that requires the Navy to maintain two antiquated 
battleships in its reserves, even though they will never again see even 
one more day of battle. This provision requires the Navy to maintain 
two Iowa-class battleships as mobilization assets, even though the Navy 
will never again rely on them to protect American interests.
  The Iowa-class battleships were commissioned during World War II. 
They were built at the request of President Franklin Roosevelt to be 
the American Navy's fastest battleship, and their 16-inch guns were 
designed to pummel our adversaries' shores. There is no doubt that 
these battleships are of significant historical importance to the 
American military heritage. They represent America's pride in its Navy. 
They symbolize our admiration for those who worked so hard to build and 
serve aboard our battleships.
  In 1995, the Navy determined that all four of the World War II era 
Iowa-class battleships in its arsenal--the USS Iowa, USS New Jersey, 
USS Missouri, and USS Wisconsin--were no longer essential to our 
national defense. Subsequently, the Navy struck these four ships from 
the Naval Vessel Register. The laws governing the disposal of ships 
stricken from the Register allow the Navy to donate these ships to 
states, local communities, and non-profits for display as memorials and 
museums. Thus, in 1995, the Navy was set to begin the process of 
donating all four ships.
  But the Senate Armed Services Committee disagreed with the Navy's 
decision to release these ships, the Committee included a provision in 
the fiscal year 1996 Defense Authorization Act mandating that the Navy 
maintain at least two of the Iowa-class battleships on the Naval Vessel 
Register. The Navy subsequently chose the USS New Jersey and the USS 
Wisconsin to comply

[[Page S753]]

with this provision. The bill I am introducing today would repeal this 
requirement, enabling the Navy to once again strike these ships from 
the Register and make them available for donation to interested 
communities.
  Mr. President, I hope the members of this distinguished body will 
approve my proposal to repeal this law. It makes sense from a national 
defense perspective. Navy Secretary Dalton has said that the Navy has 
no plans to reactivate these ships. In a recent letter to the 
Appropriations Committee, he wrote, ``the Navy does not intend to 
return the ships to service. . .'' They will never again fire their 16-
inch guns to support an amphibious landing or operation ashore. They 
will never again serve as a platform for surface fire-support. Instead, 
they will only continue to sit, mothballed at Naval ports, awaiting a 
call to duty that they will never hear.
  This bill also makes sense from a fiscal perspective. According to 
Navy estimates, the cost of maintaining these ships is approximately 
$200,000 per ship per year. To date, the Navy has already spent close 
to $1 million to mothball ships that will never again be reactivated 
for purposes of national defense. I see no sense in the federal 
government's paying for the Navy to keep ships ready for a war in which 
it will never call them to serve. The American taxpayer deserves a 
better deal.
  Although these ships have been deactivated for good, they can still 
continue to be of immense public benefit. On the eve of the twenty-
first century, many of our nation's waterfront cities are struggling to 
resurrect their economies. The federal government spends millions each 
year on projects to help revitalize blighted waterfront communities. 
Since the laws governing the disposal of former Navy assets allow their 
donation, we are presented with a unique opportunity to contribute to 
the economic development of our cities--at no further cost to the 
federal government. Many of our communities want to compete to berth a 
ship on their shores, as a museum and memorial, to anchor a waterfront 
development project. But the 1996 law is depriving these communities of 
a chance to undergo major revitalization efforts.
  The citizens of New Jersey recognized the economic development 
potential of these battleships many years ago. My constituents have 
been preparing for the return of the USS New Jersey as the only Iowa-
class battleship which may be berthed as an educational museum and 
memorial in her namesake state. Tens of thousands of volunteers have 
devoted countless hours to this long-standing, state-wide project. The 
New Jersey legislature created the Battleship New Jersey Commission, 
which has undertaken an ambitious fundraising effort to obtain the USS 
New Jersey. To date, the Commission has secured approximately $3 
million for this effort through sales of a ``Battleship New Jersey'' 
license plate, a state income tax check-off, and private donations. But 
New Jersey's efforts are hamstrung by the 1996 law requiring the Navy 
to maintain the Iowa-class battleships on the Naval Vessel Register.
  Repealing this law will have a three-fold public benefit. First and 
most obvious, we will no longer need to provide funding in our defense 
budget for ships that will never be reactivated. This alone warrants 
the support of my proposal. Second, we will contribute to the economic 
development of our cities at no further cost to the federal government. 
And third, we will enable generations of Americans to honor the history 
of our battleships by facilitating their display as memorials and 
museums.
  Forcing the Navy to keep the Iowa-class battleships ready for war is 
the equivalent of forcing NASA to keep the Apollo rockets ready to 
blast off into space. As we all know, the Apollo project was undertaken 
to send Americans to the moon. Will we ever want to send an American to 
the moon again? Probably--but not in an Apollo rocket. Even though 
advances in technology have rendered the Apollos relics of the American 
determination to succeed, their preservation at locations throughout 
the country allows the public to admire and appreciate their legacy. 
And NASA doesn't have to keep paying for them.
  Mr. President, I look forward to working with the members of the 
Armed Services Committee to pass this bill. It is good for the American 
taxpayers and our national defense, and I hope my colleagues will join 
me in this effort.
  Mr. President, I ask unanimous consent that the text of this bill be 
placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1646

         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 ``Historic Battleship 
     Preservation Act''.

     SEC. 2. REPEAL OF REQUIREMENT FOR CONTINUED LISTING OF TWO 
                   IOWA-CLASS BATTLESHIPS ON THE NAVAL VESSEL 
                   REGISTER.

       Section 1011 of the National Defense Authorization Act for 
     Fiscal Year 1996 (Public Law 104-106; 110 Stat. 421) is 
     repealed.

  Mr. TORRICELLI. Mr. President, I rise today with Senator Lautenberg 
in introducing legislation that will make the dream of bringing the 
battleship U.S.S. New Jersey home to New Jersey a reality. I want to 
thank Senator Lautenberg for his hard work and commitment to this 
issue, and look forward to working with him to ensure that this symbol 
of freedom returns to her namesake-state in the near future.
  The U.S.S. New Jersey is one of the most notable battleships in the 
Navy's history. She has been protecting and defending democracy since 
World War II in almost every region of the world. Launched on December 
7, 1942, one year after the infamous attack on Pearl Harbor, the ship 
proceeded to the Pacific where she was involved in many historic 
campaigns, including the battles for the Marshalls, Marianas, 
Philippines, Iwo Jimo and Okinawa. A particular highlight of the New 
Jersey's career was service as flagship for Commander Third Fleet, 
Admiral ``Bull'' Halsey, during the Battle of Leyte Gulf in October 
1944.
  Once the Japanese surrendered in 1945, the New Jersey settled into a 
peacetime routine, and was decommissioned in 1948. The ship was 
recommissioned in 1950 for the Korean war, in 1968 for Vietnam, and 
again in 1982 when former President Reagan ordered the re-activation of 
all four Iowa-class battleships as part of a massive naval buildup. In 
February 1991, because of end to the Cold War, another victory which 
she helped to secure, the New Jersey was decommissioned for a final 
time and is now in Bremerton, Washington.
  Following the removal of the U.S.S. New Jersey from the Naval Vessel 
Register, the New Jersey legislature created the Battleship New Jersey 
Commission, which applied for donation of the ship to the State of New 
Jersey. The Commission, and tens of thousands of volunteers, have 
undertaken a massive fundraising effort to pay for the costs of 
transporting the U.S.S. New Jersey home, and have already secured 
approximately $3 million for this effort. Together with the people of 
our state, the Commission has been actively preparing for the return of 
the U.S.S. New Jersey as the only Iowa-class battleship which may be 
berthed as an educational museum and memorial in her namesake state.
  None of this hard work and sacrifice will make a difference though, 
without the repeal of Section 1011 of the fiscal year 1996 Defense 
Authorization Act, which requires the Navy to maintain at least two of 
the Iowa-class battleships that have been stricken from the Naval 
Vessel Register. This provision was included to ensure that the Navy 
would have the necessary firepower to support Marine Corps' amphibious 
assaults and operations ashore. In accordance with this requirement, 
the Navy is currently maintaining the U.S.S. New Jersey and the U.S.S. 
Wisconsin and neither ship is available for distribution to the states.
  However, the Navy does not want nor do they need these ships. It is 
my understanding that the Navy can effectively support the Marines 
through the use of other platforms, and does not require the U.S.S. New 
Jersey for this important task. Secretary Dalton has said that the Navy 
has no plans to reactivate these proud ships, and is forced to spend 
$200,000 per ship, per year to mothball ships that will never again be 
reactivated for the purposes of national defense.
  Senator Lautenberg and I have also sent letters to Secretary Dalton 
and

[[Page S754]]

the Senate Armed Services Committee regarding this matter, but have 
decided that the most effective way to proceed is with a legislative 
remedy. Our bill would eliminate Section 1011, and remove one of the 
last obstacles preventing the U.S.S. New Jersey from making the long 
journey home to our state.
  During New Jersey's final decommissioning ceremony, her last 
commanding officer, Captain Robert C. Peniston remarked, ``Rest well, 
yet sleep lightly; and hear the call if again sounded, to provide 
firepower for freedom.'' It is only just that the U.S.S. New Jersey 
rest well in the welcome waters off the coast of her namesake state, 
and enjoy the company of the people that she fought so hard to protect 
throughout her time in the active duty fleet.
  America is profoundly thankful for the service of the U.S.S. New 
Jersey and the patriotism of the courageous men and women who served 
aboard her. For the reasons I stand today to recognize the Battleship 
New Jersey Commission, and the generations of Americans who went to war 
with the U.S.S. New Jersey. I am proud to offer this legislation with 
Senator Lautenberg.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Ms. Snowe, Mr. Lieberman, Mr. 
        Kempthorne, Mr. Daschle, Mr. Dodd, Mr. Durbin, Mr. Lautenberg, 
        Ms. Collins, Mr. Johnson, and Mr. Kennedy) (by request):
  S. 1647. A bill to reauthorize and make reforms to programs 
authorized by the Public Works and Economic Development Act of 1965; to 
the Committee on Environment and Public Works.


            The economic development partnership act of 1998

  Mr. BAUCUS. Mr. President, I rise today to introduce a bill to 
reauthorize programs within the Economic Development Administration. It 
is with great pleasure that I am joined by my colleagues, Senators 
Snowe, Lieberman, Kempthorne, Daschle, Dodd, Durbin, Lautenberg, 
Collins, Johnson, and Kennedy.
  Mr. President, programs under the jurisdiction of the Economic 
Development Administration have not been reauthorized for almost two 
decades. Despite the uncertainty and instability this has created, EDA 
has become the cornerstone for efforts to strengthen and diversify the 
economies of our nation's communities.
  Since its inception in 1965, the EDA has established an impressive 
track record of helping communities help themselves. These 
``bootstrap'' efforts have allowed communities to meet economic 
challenges in a variety of ways--making public works improvements to 
attract new businesses and providing technical assistance and planning 
grants that allow a community to plan for their future for example.
  In my home state of Montana, EDA has been a powerful force in 
responding to the changing economic conditions in communities that have 
relied on one industry--only to see that industry shut down and move 
away. EDA's planning and public works assistance has allowed these 
communities to attract new companies, retain companies already in place 
and diversify their economies.
  EDA has also been instrumental in responding to and assisting areas 
affected by natural disasters. In Florida and Louisiana, EDA was there 
to help businesses affected by the devastation of Hurricane Andrew. And 
EDA is still working with those areas of the Midwest devastated by the 
disastrous floods of 1993 and those areas recently impacted by floods 
in the Pacific Northwest.
  The programs within the EDA have become even more critical to 
Congress' efforts to alleviate and address job losses due to the 
closure and realignment of military bases around the country.
  The EDA's programs are effective tools that are used on the local 
level--working hand-in-hand with local governments and businesses to 
develop future economic investment strategies. By acting as a catalyst, 
economic development funds are used to attract significant private 
contributions and support.
  Despite efforts to dismantle the EDA, the agency has matured in its 
approach to local economic development efforts. But the lack of 
authorization has not allowed Congress to make necessary changes to the 
statute and mission of the EDA. As with any program, there are some 
areas that are working well and other areas that need to be refined. 
The lack of authorization has left some aspects of EDA's programs 
outdated or unnecessary. That is why I am introducing this bill today--
a bill to streamline and advance EDA's successful programs.
  Mr. President, our country is faced with many challenges. Many of our 
communities are in economic transition and need to strengthen the 
diversity of their economies. We need to reauthorize EDA. It is high 
time we recognize the important role that EDA plays in the future of 
this country.
  Mr. President, I ask unanimous consent that a copy of the bill be 
printed in the Congressional Record, along with a brief section-by-
section.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 1647

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

     SECTION 1. SHORT TITLE; EFFECTIVE DATE.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Development Partnership Act of 1998''.
       (b) Effective Date.--Except as otherwise expressly 
     provided, the provisions of this Act and the amendments made 
     by this Act shall take effect as determined by the Secretary 
     of Commerce (hereinafter referred to as the Secretary), but 
     not later than three months after the date of the enactment 
     of this Act.

     SEC. 2. REAUTHORIZATION OF PUBLIC WORKS AND ECONOMIC 
                   DEVELOPMENT ACT OF 1965.

       The Public Works and Economic Development Act of 1965 (42 
     U.S.C. 3131 et seq.) is amended by striking all after the 
     first section and inserting the following:

     ``SEC. 2. FINDINGS AND DECLARATION.

       ``(a) Findings.--Congress finds that--
       ``(1) the maintenance of the national economy at a high 
     level is vital to the best interests of the United States, 
     but that some of our regions, counties, and communities are 
     suffering substantial and persistent unemployment and 
     underemployment that cause hardship to many individuals and 
     their families, and waste invaluable human resources;
       ``(2) to overcome this problem the Federal Government, in 
     cooperation with the States, should help areas and regions of 
     substantial and persistent unemployment and underemployment 
     to take effective steps in planning and financing their 
     public works and economic development;
       ``(3) Federal financial assistance, including grants for 
     public works and development facilities to communities, 
     industries, enterprises, and individuals in areas needing 
     development should enable such areas to help themselves 
     achieve lasting improvement and enhance the domestic 
     prosperity by the establishment of stable and diversified 
     local economies, sustainable development, and improved local 
     conditions, if such assistance is preceded by and consistent 
     with sound, long-range economic planning; and
       ``(4) under the provisions of this Act, new employment 
     opportunities should be created by developing and expanding 
     new and existing public works and other facilities and 
     resources rather than by merely transferring jobs from one 
     area of the United States to another, and by supporting firms 
     and industries which add to the growth of the nation's 
     economy through improved technology, increased exports, and 
     the supply of goods and services to satisfy unmet demand.
       ``(b) Declaration.--Congress declares that, in furtherance 
     of maintaining the national economy at a high level--
       ``(1) the assistance authorized by this Act should be made 
     available to both rural and urban areas;
       ``(2) such assistance should be made available for planning 
     for economic development prior to the actual occurrences of 
     economic distress in order to avoid such condition; and
       ``(3) Such assistance should be used for long-term economic 
     rehabilitation in areas where long-term economic 
     deterioration has occurred or is taking place.

     ``TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS COOPERATION AND 
                              COORDINATION

     ``SEC. 101. ESTABLISHMENT OF ECONOMIC DEVELOPMENT 
                   PARTNERSHIPS.

       ``(a) In General.--In providing assistance under this Act, 
     the Secretary shall cooperate with States and other entities 
     to assure that, consistent with national objectives, Federal 
     programs are compatible with and further the objectives of 
     State, regional and local economic development plans and 
     comprehensive economic development strategies.
       ``(b) Technical Assistance.--The Secretary shall provide 
     such technical assistance to States, local governmental 
     subdivisions of States, sub-State regional organizations 
     (including organizations which cross State boundaries, and 
     multi-State regional organizations as the Secretary 
     determines may be necessary or desirable to alleviate 
     economic distress, encourage and support public-private 
     partnerships for the formation and improvement of economic 
     development strategies which promote the growth of the 
     national economy, stimulate modernization

[[Page S755]]

     and technological advances in the generation and 
     commercialization of goods and services, and enhance the 
     effectiveness of American firms in the global economy.
       ``(c) Intergovernmental Review.--The Secretary shall 
     prescribe regulations which will assure that appropriate 
     State and local governmental authorities have been given a 
     reasonable opportunity to review and comment upon proposed 
     projects which the Secretary determines may have a 
     significant direct impact on the economy of the area.
       ``(d) Cooperative Agreements.--The Secretary may enter into 
     a cooperative agreement with any two or more adjoining 
     States, or an organization thereof, in support of effective 
     economic development. Each such agreement shall provide for 
     suitable participation by other governmental and 
     nongovernmental parties representative of significant 
     interests in and perspectives on economic development in the 
     area.

     ``SEC. 102. COOPERATION OF FEDERAL AGENCIES.

       ``Each Federal department and agency, in accordance with 
     applicable laws and within the limits of available funds, 
     shall exercise its powers, duties and functions, and shall 
     cooperate with the Secretary in such manner as will assist 
     the Secretary in carrying out the objectives of this Act.

     ``SEC. 103. COORDINATION.

       ``The Secretary shall actively coordinate with other 
     Federal programs, States, economic development districts, and 
     other appropriate planning and development organizations the 
     activities relating to the requirements for comprehensive 
     economic development strategies and making grants under this 
     Act.

     ``SEC. 104. NATIONAL ADVISORY COMMITTEE.

       ``The Secretary may appoint a National Public Advisory 
     Committee on Regional Economic Development which shall 
     consist of twenty-five members and shall be composed of 
     representatives of labor, management, agriculture, State and 
     local governments, Federal agencies, and the public in 
     general. From the members appointed to such Committee the 
     Secretary shall designate a Chairman. Such Committee, or any 
     duly established subcommittee thereof, shall from time to 
     time make recommendations to the Secretary relative to the 
     carrying out of the Secretary's duties under this Act, 
     including the coordination of activities as provided in 
     section 103. Such Committee shall hold not less than two 
     meetings during each calendar year, and shall be governed by 
     the provisions of the Federal Advisory Committee Act.

      ``TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

     ``SEC. 201. PUBLIC WORKS GRANTS.

       ``(a) Upon the application of any eligible recipient the 
     Secretary may make direct grants for acquisition or 
     development of land improvements for public works, public 
     service, or development facility usage, and the acquisition, 
     design and engineering, construction, rehabilitation, 
     alteration, expansion, or improvement of such facilities, 
     including related machinery and equipment.
       ``(b) The Secretary may provide assistance under this 
     section only if the Secretary finds that--
       ``(1) the project for which financial assistance is sought 
     will directly or indirectly--
       ``(A) tend to improve the opportunities, in the area where 
     such project is or will be located, for the successful 
     establishment or expansion of industrial or commercial plants 
     or facilities;
       ``(B) otherwise assist in the creation of additional long-
     term employment opportunities of such area;
       ``(C) primarily benefit the long-term unemployed and 
     members of low-income families; or
       ``(D) in the case of projects within areas described in 
     section 302(a)(8), the project will enhance the economic 
     growth potential of the area or result in additional long-
     term employment opportunities commensurate with the amount of 
     Federal financial assistance requested;
       ``(2) the project for which a grant is requested will 
     fulfill a pressing need of the area, or part thereof, in 
     which it is, or will be, located; and
       ``(3) the area for which a project is to be undertaken has 
     a satisfactory comprehensive economic development strategy as 
     provided by section 303 and such project is consistent with 
     such strategy.
       ``(c) In the case of an area described in section 
     302(a)(4), the Secretary may provide assistance only if the 
     Secretary finds that the project to be undertaken will 
     provide immediate useful work to unemployed and underemployed 
     persons in that area.
       ``(d) Not more than 15 per centum of the appropriations 
     made pursuant to this section may be expended in any one 
     State.

     ``SEC. 202. CONSTRUCTION COST INCREASES.

       ``In any case where a grant (including a supplemental 
     grant) has been made by the Secretary under this title or 
     made, before the effective date of the Economic Development 
     Partnership Act of 1998, under title I of this act, as in 
     effect before such effective date, for a construction project 
     and after such grant has been made but before completion of 
     the project, the cost of such project based upon the designs 
     and specifications which were the basis of the grant has been 
     increased because of increases in costs, the amount of such 
     grant may be increased by an amount equal to the percentage 
     increase, as determined by the Secretary, in such costs, but 
     in no event shall the percentage of the Federal share of such 
     project exceed that originally provided for in such grant.

     ``SEC. 203. PLANNING AND ADMINISTRATIVE EXPENSES.

       ``(a) Upon the application of any eligible recipient the 
     Secretary may make direct grants for economic development 
     planning and the administrative expenses of organizations 
     undertaking such planning.
       ``(b) The planning for cities, other political 
     subdivisions, Indian tribes, and sub-State planning and 
     development organizations (including areas described in 
     section 302(a) and economic development districts) assisted 
     under this title shall include systematic efforts to reduce 
     unemployment and increase incomes.
       ``(c) The planning shall be a continuous process involving 
     public officials and private citizens in analyzing local 
     economies, defining development goals, determining project 
     opportunities and formulating and implementing a development 
     program.
       ``(d) The planning assistance authorized under this title 
     shall be used in conjunction with any other available Federal 
     planning assistance to assure adequate and effective planning 
     and economical use of funds.
       ``(e) Any State plan prepared with assistance under this 
     section shall be prepared cooperatively by the State, its 
     political subdivisions, and the economic development 
     districts located in whole or in part within such State, as a 
     comprehensive economic development strategy. Upon completion 
     of any such plan, the State shall (1) certify to the 
     Secretary that in the preparation of the State plan, the 
     local and economic development district plans were considered 
     and, to the fullest extent possible, the State plan is 
     consistent with the local and economic development district 
     plans, and (2) identify any inconsistencies between the State 
     plan and the local and economic development district plans, 
     with the justification for each inconsistency. Any overall 
     State economic development planning shall be a part of a 
     comprehensive planning process that shall consider the 
     provisions of public works to stimulate and channel 
     development, economic opportunities and choices for 
     individuals, to support sound land use, to foster effective 
     transportation access, to promote sustainable development, to 
     enhance and protect the environment including the 
     conservation and preservation of open spaces and 
     environmental quality, to provide public services, and to 
     balance physical and human resources through the management 
     and control of physical development. Each State receiving 
     assistance for the preparation of a plan according to the 
     provisions of this subsection shall submit to the Secretary 
     an annual report on the planning process assisted under this 
     subsection.

     ``SEC. 204. COST SHARING.

       ``Subject to section 205, the amount of any direct grant 
     under this title for any project shall not exceed 50 percent 
     of the cost of such project. In determining the amount of the 
     non-Federal share of costs or expenses, the Secretary shall 
     give due consideration to all contributions both in cash 
     and in kind, fairly evaluated, including contributions of 
     space, equipment, and services.

     ``SEC. 205. SUPPLEMENTARY GRANTS.

       ``(a) In General.--Upon the application of any eligible 
     recipient, the Secretary may make a supplementary grant for a 
     project for which the applicant is eligible but, because of 
     its economic situation, for which it cannot supply the 
     required matching share. Included therein may be 
     supplementary grants made to enable the States and other 
     entities within areas described in section 302(a) to take 
     maximum advantage of designated Federal grant-in-aid programs 
     (as defined in subsection (b)(4) of this section), direct 
     grants-in-aid authorized under this title, and Federal grant-
     in-aid programs authorized by the Watershed Protection and 
     Flood Prevention Act (68 Stat. 666), and the 11 watersheds 
     authorized by the Flood Control Act of December 22, 1944 (58 
     Stat. 887).
       ``(b) Requirements Applicable to Supplementary Grants.--
       ``(1) Amount of supplementary grants.--The amount of any 
     supplementary grant under this title for any project shall 
     not exceed the applicable percentage established by 
     regulations promulgated by the Secretary, but in no event 
     shall the non-Federal share of the aggregate cost of any such 
     project (including assumptions of debt) be less than 20 
     percent of such cost, except as provided in subsection 
     (b)(6).
       ``(2) Form of supplementary grants.--Supplementary grants 
     shall be made by the Secretary, in accordance with such 
     regulations as the Secretary may prescribe, by increasing the 
     amounts of direct grants authorized under this title or by 
     the payment of funds appropriated under this act to the heads 
     of the departments, agencies, and instrumentalities of the 
     Federal Government responsible for the administration of the 
     applicable Federal programs.
       ``(3) Federal share limitations specified in other laws.--
     Notwithstanding any requirement as to the amount or sources 
     of non-Federal funds that may otherwise be applicable to the 
     Federal program involved, funds provided under this 
     subsection may be used for the purpose of increasing the 
     Federal contribution to specific projects in areas described 
     in section 302(a) under such programs above the fixed maximum 
     portion of the cost of such project otherwise authorized by 
     the applicable law.

[[Page S756]]

       ``(4) Designated federal grant-in-aid programs defined.--In 
     this section, the term `designated Federal grant-in-aid 
     programs' means such existing or future Federal grant-in-aid 
     programs assisting in the construction or equipping of 
     facilities as the Secretary may, in furtherance of the 
     purposes of this Act, designate as eligible for allocation of 
     funds under this section.
       ``(5) Consideration of relative need in determining 
     amount.--In determining the amount of any supplementary grant 
     available to any project under this title, the Secretary 
     shall take into consideration the relative needs of the area 
     and the nature of the project to be assisted.
       ``(6) Exceptions.--In the case of a grant to an Indian 
     tribe, the Secretary may reduce the non-Federal share below 
     the percentage specified in subsection (b)(1) or may waive 
     the non-Federal share. In the case of a grant to a State or a 
     political subdivision of a State which the Secretary 
     determines has exhausted its effective taxing and borrowing 
     capacity, or of a grant to a nonprofit organization which the 
     Secretary determines has exhausted its effective borrowing 
     capacity, the Secretary may reduce the non-Federal share 
     below the percentage specified in subsection (b)(1) or may 
     waive the non-Federal share for (i) a project in an area 
     described in section 302(a)(4), or (ii) a project the nature 
     of which the Secretary determines warrants the reduction or 
     waiver of the non-Federal share.

     ``SEC. 206. REGULATIONS TO ASSURE RELATIVE NEEDS ARE MET.

       ``The Secretary shall prescribe rules, regulations, and 
     procedures to carry out this title which will assure that 
     adequate consideration is given to the relative needs of 
     eligible areas. In prescribing such rules, regulations, and 
     procedures for assistance under section 201 the Secretary 
     shall consider among other relevant factors--
       ``(1) the severity of the rates of unemployment in the 
     eligible areas and the duration of such unemployment;
       ``(2) the income levels of families and the extent of 
     underemployment in eligible areas; and
       ``(3) the out-migration of population for eligible areas.

     ``SEC. 207. TRAINING, RESEARCH, & TECHNICAL ASSISTANCE.

       ``(a) Upon the application of any eligible recipient the 
     Secretary may make direct grants for training, research, and 
     technical assistance, including grants for program evaluation 
     and economic impact analyses, which would be useful in 
     alleviating or preventing conditions of excessive 
     unemployment or underemployment. Such assistance may include 
     project planning and feasibility studies, demonstrations of 
     innovative activities or strategic economic development 
     investments, management and operational assistance, 
     establishment of university centers, establishment of 
     business outreach centers, and studies evaluating the needs 
     of, and development potentialities for, economic growth of 
     areas which the Secretary finds have substantial need for 
     such assistance. The Secretary may waive the non-Federal 
     share in the case of a project under this section, without 
     regard to the provisions of section 204 or 205.
       ``(b) In carrying out the Secretary's duties under this 
     Act, the Secretary may provide research and technical 
     assistance through members of the Secretary's staff; the 
     payment of funds authorized for this section to departments 
     or agencies of the Federal Government; the employment of 
     private individuals, partnerships, firms, corporations, or 
     suitable institutions under contracts entered into for such 
     purposes; or the award of grants under this title.

     ``SEC. 208. RELOCATION OF INDIVIDUALS AND BUSINESSES.

       ``Grants to eligible recipients shall include such amounts 
     as may be required to provide relocation assistance to 
     affected persons, as required by the Uniform Relocation 
     Assistance and Real Property Acquisition Act 1970, as 
     amended.

     ``SEC. 209. ECONOMIC ADJUSTMENT.

       ``(a) Upon the application of any eligible recipient the 
     Secretary may make direct grants for public facilities, 
     public services, business development (including a revolving 
     loan fund), planning, technical assistance, training, and 
     other assistance which demonstrably furthers the economic 
     adjustment objectives of this Act, including activities to 
     alleviate long-term economic deterioration, and sudden and 
     severe economic dislocations.
       ``(b) The Secretary may provide assistance under this 
     section only if the Secretary finds that--
       ``(1) the project will help the area meet a special need 
     arising from--
       ``(A) actual or threatened severe unemployment arising from 
     economic dislocation, including unemployment arising from 
     actions of the Federal Government or from compliance with 
     environmental requirements which remove economic activities 
     from a locality; or
       ``(B) economic adjustment problems resulting from severe 
     changes in economic conditions (including long-term economic 
     deterioration); and
       ``(2) the area for which a project is to be undertaken has 
     a satisfactory comprehensive economic development strategy as 
     provided by section 303 and such project is consistent with 
     such strategy. This subsection (b)(2) shall not apply to 
     planning projects.
       ``(c) Assistance under this section shall extend to 
     activities identified by communities impacted by military 
     base closures, defense contractor cutbacks, and Department of 
     Energy reductions, to help the communities diversify their 
     economies. Nothing in this section is intended to replace the 
     efforts of the economic adjustment program of the Department 
     of Defense.
       ``(d) Assistance under this section shall extend to post-
     disaster activities in areas affected by natural and other 
     disasters.

     ``SEC. 210. DIRECT EXPENDITURE OR REDISTRIBUTION BY 
                   RECIPIENT.

       ``Amounts from grants under section 209 of this title may 
     be used in direct expenditures by the eligible recipient or 
     through redistribution by the eligible recipient to public 
     and private entities in grants, loans, loan guarantees, 
     payments to reduce interest on loan guarantees, or other 
     appropriate assistance, but no grant shall be made by an 
     eligible recipient to a private profit-making entity.

     ``SEC. 211. CHANGED PROJECT CIRCUMSTANCES.

       ``In any case where a grant (including a supplemental 
     grant) has been made by the Secretary under this title (or 
     made under this Act, as in effect on the day before the 
     effective date of the Economic Development Partnership Act of 
     1998) for a project, and after such grant has been made but 
     before completion of the project, the purpose or scope of 
     such project which were the basis of the grant has changed, 
     the Secretary may approve the use of grant funds on such 
     changed project if the Secretary determines that such changed 
     project meets the requirements of this title and that such 
     changes are necessary to enhance economic development in the 
     area.

     ``SEC. 212. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER 
                   PROJECTED COST.

       ``In any case where a grant (including a supplemental 
     grant) has been made by the Secretary under this title (or 
     made under this Act, as in effect on the day before the 
     effective date of the Economic Development Partnership Act of 
     1998) for a construction project, and after such grant has 
     been made but before completion of the project, the cost of 
     such project based upon the designs and specifications which 
     was the basis of the grant has decreased because of decreases 
     in costs, such underrun funds may be used to improve the 
     project either directly or indirectly as determined by the 
     Secretary.

     ``SEC. 213. BASE CLOSINGS AND REALIGNMENTS.

       ``(a) Location of Projects.--In any case in which the 
     Secretary determines a need for assistance under this title 
     due to the closure or realignment of a military or Department 
     of Energy installation, the Secretary may make such 
     assistance available for projects to be carried out on the 
     installation and for projects to be carried out in 
     communities adversely affected by the closure or realignment.
       ``(b) Interest in Property.--Notwithstanding any other 
     provision of law, the Secretary may provide to an eligible 
     recipient any assistance available under this Act for a 
     project to be carried out on a military or Department of 
     Energy installation that is closed or scheduled for closure 
     or realignment without requiring that the eligible recipient 
     have title to the property or a leasehold interest in the 
     property for any specified term.

     ``SEC. 214. PREVENTION OF UNFAIR COMPETITION.

       ``No financial assistance under this Act shall be extended 
     to any project when the result would be to increase the 
     production of goods, materials, or commodities, or the 
     availability of services or facilities, when there is not 
     sufficient demand for such goods, materials, commodities, 
     services, or facilities, to employ the efficient capacity of 
     existing competitive commercial or industrial enterprises.

     ``SEC. 215. REPORTS BY RECIPIENT.

       ``Reports to the Secretary shall be required of recipients 
     of assistance under this Act. Such reports shall be at such 
     intervals and in such manner as the Secretary shall prescribe 
     by regulation, not to exceed ten years from the time of 
     closeout of the assistance award, and shall contain an 
     evaluation of the effectiveness of the economic assistance 
     provided under this Act in meeting the need it was designed 
     to alleviate and the purposes of this Act.

   ``TITLE III--DEFINITIONS, ELIGIBILITY AND COMPREHENSIVE ECONOMIC 
                         DEVELOPMENT STRATEGIES

     ``SEC. 301. DEFINITIONS.

       ``In this Act, unless the context otherwise requires, the 
     following definitions apply:
       ``(a) Economic development district.--The term `economic 
     development district' refers to any area within the United 
     States composed of cooperating areas described in section 
     302(a) and, where appropriate, designated economic 
     development centers and neighboring counties or communities, 
     which has been designated by the Secretary as an economic 
     development district. Such term includes any economic 
     development district designated by the Secretary under 
     section 403 of this Act, as in effect on the day before the 
     effective date of the Economic Development Partnership Act of 
     1998.
       ``(b) Economic development center.--The term `economic 
     development center' refers to any area within the United 
     States which has been identified as an economic development 
     center in an approved comprehensive economic development 
     strategy and which has been designated by the Secretary as 
     eligible for financial assistance under this Act

[[Page S757]]

     in accordance with the provisions of this section.
       ``(c) Eligible recipient.--The term `eligible recipient' 
     means an area described in section 302(a), an economic 
     development district designated under section 401, an Indian 
     tribe, a State, a city or other political subdivision of a 
     State or a consortium of such political subdivisions, an 
     institution of higher education or a consortium of such 
     institutions, or a public or private nonprofit organization 
     or association acting in cooperation with officials of such 
     political subdivisions. For grants made under section 207, 
     `eligible recipient' also includes private individuals and 
     for-profit organizations.
       ``(d) Grant.--The term `grant' includes cooperative 
     agreement, as that term is used in the Federal Grant and 
     Cooperative Agreement Act of 1977.
       ``(e) Indian tribe.--The term `Indian tribe' means an 
     Indian or Alaska Native tribe, band, nation, pueblo, village, 
     or community that the Secretary of the Interior acknowledges 
     to exist as an Indian tribe pursuant to 25 U.S.C. section 
     479a-1.
       ``(f) State.--The terms `State', `States', and `United 
     States' include the several States, the District of Columbia, 
     the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, the Republic of the Marshall Islands, the 
     Federated States of Micronesia, the Republic of Palau, and 
     the Commonwealth of the Northern Mariana Islands.

     ``SEC. 302. AREA ELIGIBILITY.

       ``(a) Certification.--In order to be eligible for 
     assistance for activities described under section 201 or 209, 
     an applicant shall certify, as part of an application for 
     such assistance, that the project is located in an area which 
     on the date of submission of such application meets one or 
     more of the following criteria:
       ``(1) The area has a per capita income of 80 percent or 
     less of the national average.
       ``(2) The area has an unemployment rate one percent above 
     the national average percentage for the most recent 24-month 
     period for which statistics are available.
       ``(3) The area has experienced or is about to experience a 
     sudden economic dislocation resulting in job loss that is 
     significant both in terms of the number of jobs eliminated 
     and the effect upon the employment rate of the area.
       ``(4) The area is one in which the Secretary determines 
     that any activities authorized to be undertaken under section 
     201 or 209 will provide immediate useful work to unemployed 
     and underemployed persons in that area, and the area is a 
     community or neighborhood (defined without regard to 
     political or other subdivisions or boundaries) which the 
     Secretary determines has one or more of the following 
     conditions:
       ``(A) A large concentration of low-income persons;
       ``(B) Areas having substantial out-migration; or
       ``(C) Substantial unemployment.
       ``(5) The area has demonstrated long-term economic 
     deterioration.
       ``(6) The area has an unemployment rate, for the most 
     recent 12 month period for which statistics are available, 
     above a rate established by regulation as an indicator of 
     substantial unemployment during conditions of significantly 
     high national unemployment.
       ``(7) The area is one which the Secretary has determined 
     has experienced, or may reasonably be foreseen to be about to 
     experience, a special need to meet an expected rise in 
     unemployment, or other economic adjustment problems 
     (including those caused by any action or decision of the 
     Federal Government).
       ``(8) The area contains a population of 250,000 or less and 
     is identified in a comprehensive economic development 
     strategy as having growth potential and the ability to 
     alleviate distress within an economic development district.
       ``(9) The area is experiencing severe outmigration.
       ``(b) Documentation.--A certification made under subsection 
     (a) shall be supported by Federal data, when available or, in 
     the absence of recent Federal data, by data available through 
     the State government. Such documentation shall be accepted by 
     the Secretary unless the Secretary determines the 
     documentation to be inaccurate. The most recent statistics 
     available shall be used.
       ``(c) Special Rule.--An area which the Secretary determines 
     is eligible for assistance because it meets 1 or more of the 
     criteria of subsection (a)(4)--
       ``(1) shall not be subject to the requirements of sections 
     201(b) or 303; and
       ``(2) shall not be eligible to meet the requirement of 
     section 401(a)(1)(B).
       ``(d) Prior Designations.--Any designation of a 
     redevelopment area made before the effective date of the 
     Economic Development Partnership Act of 1998 shall not be 
     effective after such effective date.

     ``SEC. 303. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY.

       ``(a) In General.--The Secretary may provide assistance 
     under section 201 or 209 (except for section 209 planning) to 
     an applicant for a project only if the applicant submits to 
     the Secretary, as part of an application for such assistance, 
     evidence satisfactory to the Secretary of a comprehensive 
     economic development strategy which--
       ``(1) identifies the economic development problems to be 
     addressed using such assistance;
       ``(2) identifies past, present, and projected future 
     economic development investments in the area receiving such 
     assistance and public and private participants and sources of 
     funding for such investments; and
       ``(3) sets forth a strategy for addressing the economic 
     problems identified pursuant to paragraph (a) and describes 
     how the strategy will solve such problems.
       ``(b) Other Plan.--The Secretary may accept as a 
     comprehensive economic development strategy a satisfactory 
     plan prepared under another Federally supported program.

               ``TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

     ``SEC. 401. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS AND 
                   ECONOMIC DEVELOPMENT CENTERS.

       ``(a) In General.--In order that economic development 
     projects of broader geographic significance may be planned 
     and carried out, the Secretary may--
       ``(1) designate appropriate `economic development 
     districts' within the United States with the concurrence of 
     the States in which such districts will be wholly or 
     partially located, if--
       ``(A) the proposed district is of sufficient size or 
     population, and contains sufficient resources, to foster 
     economic development on a scale involving more than a single 
     area described in section 302(a);
       ``(B) the proposed district contains at least 1 area 
     described in section 302(a);
       ``(C) the proposed district contains 1 or more areas 
     described in section 302(a) or economic development centers 
     identified in an approved district comprehensive economic 
     development strategy as having sufficient size and potential 
     to foster the economic growth activities necessary to 
     alleviate the distress of the areas described in section 
     302(a) within the district; and
       ``(D) the proposed district has a district comprehensive 
     economic development strategy which includes sustainable 
     development, adequate land use and transportation planning 
     and contains a specific program for district cooperation, 
     self-help, and public investment and is approved by the State 
     or States affected and by the Secretary;
       ``(2) designate as `economic development centers', in 
     accordance with such regulations as the Secretary shall 
     prescribe, such areas as the Secretary may deem appropriate, 
     if--
       ``(A) the proposed center has been identified and included 
     in an approved district comprehensive economic development 
     strategy and recommended by the State or States affected for 
     such special designation;
       ``(B) the proposed center is geographically and 
     economically so related to the district that its economic 
     growth may reasonably be expected to contribute significantly 
     to the alleviation of distress in the areas described in 
     section 302(a) of the district; and
       ``(C) the proposed center does not have a population in 
     excess of 250,000 according to the most recent Federal 
     census; and
       ``(3) provide financial assistance in accordance with the 
     criteria of this Act, except as may be herein otherwise 
     provided, for projects in economic development centers 
     designated under subsection (a)(2), if--
       ``(A) the project will further the objectives of the 
     comprehensive economic development strategy of the district 
     in which it is to be located;
       ``(B) the project will enhance the economic growth 
     potential of the district or result in additional long-term 
     employment opportunities commensurate with the amount of 
     Federal financial assistance requested; and
       ``(C) the amount of Federal financial assistance requested 
     is reasonably related to the size, population, and economic 
     needs of the district.
       ``(b) Authorities.--The Secretary may, under regulations 
     prescribed by the Secretary--
       ``(1) invite the several States to draw up proposed 
     economic development district boundaries and to identify 
     potential economic development centers;
       ``(2) cooperate with the several States--
       ``(A) in sponsoring and assisting district economic 
     planning and development groups; and
       ``(B) in assisting such district groups to formulate 
     district comprehensive economic development strategies; and
       ``(3) encourage participation by appropriate local 
     governmental authorities in such economic development 
     districts.

     ``SEC. 402. TERMINATION OR MODIFICATION.

       ``The Secretary shall by regulation prescribe standards for 
     the termination or modification of economic development 
     districts and economic development centers designated under 
     the authority of section 401.

     ``SEC. 403. BONUS.

       ``Subject to the 20 per centum non-Federal share required 
     for any project by subsection 205(b)(1) of this Act, the 
     Secretary is authorized to increase the amount of grant 
     assistance authorized by sections 204 and 205 for projects 
     within designated economic development districts by an amount 
     not to exceed 10 per centum of the aggregate cost of such 
     project, in accordance with such regulations as the Secretary 
     shall prescribe if--
       (1) the project applicant is actively participating in the 
     economic development activities of the district; and
       (2) the project is consistent with an approved district 
     comprehensive economic development strategy.

[[Page S758]]

     ``SEC 404. STRATEGY PROVIDED TO APPALACHIAN REGIONAL 
                   COMMISSION.

       ``Each economic development district designated by the 
     Secretary under this title shall provide that a copy of the 
     district comprehensive economic development strategy be 
     furnished to the Appalachian Regional Commission established 
     under the Appalachian Regional Development Act of 1965, if 
     any part of such district is within the Appalachian region.

     ``SEC. 405. PARTS NOT WITHIN AREAS DESCRIBED IN SECTION 
                   302(A).

       ``The Secretary is authorized to provide the financial 
     assistance which is available to an area described in section 
     302(a) under this Act to those parts of an economic 
     development district which are not within an area described 
     in section 302(a), when such assistance will be of a 
     substantial direct benefit to an area described in section 
     302(a) within such district. Such financial assistance shall 
     be provided in the same manner and to the same extent as is 
     provided in this Act for an area described in section 302(a).

                       ``TITLE V--ADMINISTRATION

     ``SEC. 501. ASSISTANT SECRETARY FOR ECONOMIC DEVELOPMENT.

       ``The Secretary will administer this Act with the 
     assistance of an Assistant Secretary of Commerce for Economic 
     Development to be appointed by the President by and with the 
     advice and consent of the Senate. The Assistant Secretary of 
     Commerce for Economic Development will perform such functions 
     as the Secretary may prescribe and will serve as the 
     administrator of the Economic Development Administration 
     within the Department of Commerce.

     ``SEC. 502. ECONOMIC DEVELOPMENT INFORMATION CLEARINGHOUSE.

       ``It shall be a duty of the Secretary in administering this 
     Act--
       ``(a) to serve as a central information clearinghouse on 
     matters relating to economic development, economic, 
     adjustment, disaster recovery, and defense conversion 
     programs and activities of the Federal and State governments, 
     including political subdivisions of the States;
       ``(b) to help potential and actual applicants for economic 
     development, economic adjustment, disaster recovery, and 
     defense conversion assistance under Federal, State, and local 
     laws in locating and applying for such assistance, including 
     financial and technical assistance; and
       ``(c) to aid areas described in section 302(a) and other 
     areas by furnishing to interested individuals, communities, 
     industries, and enterprises within such areas any technical 
     information, market research, or other forms of assistance, 
     information, or advice which would be useful in alleviating 
     or preventing conditions of excessive unemployment or 
     underemployment within such areas.

     ``SEC. 503. CONSULTATION WITH OTHER PERSONS AND AGENCIES.

       ``(a) Consultation on Problems Relating to Employment.--The 
     Secretary is authorized from time to time to call together 
     and confer with any persons, including representatives of 
     labor, management, agriculture, and government, who can 
     assist in meeting the problems of area and regional 
     unemployment or underemployment.
       ``(b) Consultation on Administration of Act.--The Secretary 
     may make provisions for such consultation with interested 
     departments and agencies as the Secretary may deem 
     appropriate in the performance of the functions vested in 
     the Secretary by this Act.

     ``SEC. 504. ADMINISTRATION, OPERATION, AND MAINTENANCE.

       ``No Federal assistance shall be approved under this Act 
     unless the Secretary is satisfied that the project for which 
     Federal assistance is granted will be properly and 
     efficiently administered, operated, and maintained.

     ``SEC. 505. FIRMS DESIRING FEDERAL CONTRACTS.

       ``The Secretary may furnish the procurement divisions of 
     the various departments, agencies, and other 
     instrumentalities of the Federal Government with a list 
     containing the names and addresses of business firms which 
     are located in areas of high economic distress and which are 
     desirous of obtaining Government contracts for the furnishing 
     of supplies or services, and designating the supplies and 
     services such firms are engaged in providing.

     ``SEC. 506. AMENDMENT TO TITLE 5, U.S.C.

       ``Section 5316 of title 5, United States Code, is amended 
     by striking `Administrator for Economic Development.'

                       ``TITLE VI--MISCELLANEOUS

     ``SEC. 601. POWERS OF SECRETARY.

       ``(a) In General.--In performing the Secretary's duties 
     under this Act, the Secretary is authorized to--
       ``(1) adopt, alter, and use a seal, which shall be 
     judicially noticed;
       ``(2) subject to the civil-service and classification laws, 
     select, employ, appoint, and fix the compensation of such 
     personnel as may be necessary to carry out the provisions of 
     this Act;
       ``(3) hold such hearings, sit and act at such times and 
     places, and take such testimony, as the Secretary may deem 
     advisable;
       ``(4) request directly from any executive department, 
     bureau, agency, board, commission, office, independent 
     establishment, or instrumentality information, suggestions, 
     estimates, and statistics needed to carry out the purposes of 
     this Act; and each department, bureau, agency, board, 
     commission, office, establishment, or instrumentality is 
     authorized to furnish such information, suggestions, 
     estimates, and statistics directly to the Secretary;
       ``(5) consistent with the Debt Collection Improvement Act 
     of 1996, under regulations prescribed by the Secretary, 
     assign or sell at public or private sale, or otherwise 
     dispose of for cash or credit, in the Secretary's discretion 
     and upon such terms and conditions and for such consideration 
     as the Secretary determines to be reasonable, any evidence of 
     debt, contract, claim, personal property, or security 
     assigned to or held by the Secretary in connection with 
     assistance extended under the Act, and collect or compromise 
     all obligations assigned to or held by the Secretary in 
     connection with such assistance until such time as such 
     obligations may be referred to the Attorney General for suit 
     or collection;
       ``(6) deal with, complete, renovate, improve, modernize, 
     insure, rent, or sell for cash or credit, upon such terms and 
     conditions and for such consideration as the Secretary 
     determines to be reasonable, any real or personal property 
     conveyed to or otherwise acquired by the Secretary in 
     connection with assistance extended under this Act;
       ``(7) consistent with the Debt Collection Improvement Act 
     of 1996, pursue to final collection, by way of compromise or 
     other administrative action, prior to reference to the 
     Attorney General, all claims against third parties assigned 
     to the Secretary in connection with assistance extended under 
     this Act;
       ``(8) acquire, in any lawful manner, any property (real, 
     personal, or mixed, tangible or intangible), whenever 
     necessary or appropriate in connection with assistance 
     extended under this Act;
       ``(9) in addition to any powers, functions, privileges, and 
     immunities otherwise vested in the Secretary, take any 
     action, including the procurement of the services of 
     attorneys by contract, determined by the Secretary to be 
     necessary or desirable in making, purchasing, servicing, 
     compromising, modifying, liquidating, or otherwise 
     administratively dealing with assets held in connection with 
     financial assistance extended under this Act;
       ``(10) employ experts and consultants or organizations as 
     authorized by section 3109 of title 5, United States Code, 
     compensate individuals so employed, including travel time, 
     and allow them, while away from their homes or regular places 
     of business, travel expenses (including per diem in lieu of 
     subsistence) as authorized by section 5703 of title 5, United 
     States Code, for persons in the Government service employed 
     intermittently, while so employed, except that contracts for 
     such employment may be renewed annually;
       ``(11) establish performance measures for grants and other 
     assistance provided under this Act, and use such performance 
     measures to evaluate the economic impact of economic 
     development assistance programs; the establishment and use of 
     such performance measures to be provided by the Secretary 
     through members of his staff, through the employment of 
     appropriate parties under contracts entered into for such 
     purposes, or through grants to such parties for such 
     purposes, using any funds made available by appropriations to 
     carry out this Act;
       ``(12) sue and be sued in any court of record of a State 
     having general jurisdiction or in any United States district 
     court, and jurisdiction is conferred upon such district court 
     to determine such controversies without regard to the amount 
     in controversy; but no attachment, injunction, garnishment, 
     or other similar process, mesne or final, shall be issued 
     against the Secretary or the Secretary's property; and
       ``(13) establish such rules, regulations, and procedures as 
     the Secretary considers appropriate in carrying out the 
     provisions of this Act.
       ``(b) Deficiency Judgments.--The authority under subsection 
     (a)(7) to pursue claims shall include the authority to obtain 
     deficiency judgments or otherwise in the case of mortgages 
     assigned to the Secretary.
       ``(c) Inapplicability of Certain Other Requirements.--
     Section 3709 of the Revised Statutes of the United States 
     shall not apply to any contract of hazard insurance or to any 
     purchase or contract for services or supplies on account of 
     property obtained by the Secretary as a result of assistance 
     extended under this Act if the premium for the insurance or 
     the amount of the insurance does not exceed $1,000.
       ``(d) Property Interests.--The powers of the Secretary, 
     pursuant to this section, in relation to property acquired by 
     the Secretary in connection with assistance extended under 
     this Act, shall extend to property interests of the Secretary 
     in relation to projects approved under the Public Works and 
     Economic Development Act of 1965, title I of the Public Works 
     Employment Act of 1976, title II of the Trade Act of 1974, 
     and the Community Emergency Drought Relief Act of 1977. 
     Property interests in connection with grants may be released, 
     in whole or in part, in the Secretary's discretion, after 20 
     years from the date of grant disbursement.
       ``(e) Powers of Conveyance and Execution.--The power to 
     convey and to execute, in the name of the Secretary, deeds of 
     conveyance, deeds of release, assignments and satisfactions 
     of mortgages, and any other written instrument relating to 
     real or personal property or any interest therein acquired by 
     the Secretary pursuant to the provisions of this Act may be 
     exercised by the Secretary, or by any officer or agent 
     appointed by the Secretary for such purpose,

[[Page S759]]

     without the execution of any express delegation of power or 
     power of attorney.

     ``SEC. 602. MAINTENANCE OF STANDARDS.

       ``The Secretary shall continue to implement and enforce the 
     provisions of section 712 of this Act, as in effect on the 
     day before the effective date of the Economic Development 
     Partnership Act of 1998.

     ``SEC. 603. ANNUAL REPORT TO CONGRESS.

       ``The Secretary shall transmit a comprehensive and detailed 
     annual report to Congress of the Secretary's activities under 
     this Act for each fiscal year beginning with the fiscal year 
     ending September 30, 1999. Such report shall be printed and 
     shall be transmitted to Congress not later than July 1 of the 
     year following the fiscal year with respect to which such 
     report is made.

     ``SEC. 604. USE OF OTHER FACILITIES.

       ``(a) Delegation of Functions to Other Federal Departments 
     and Agencies.--The Secretary may delegate to the heads of 
     other departments and agencies of the Federal Government any 
     of the Secretary's functions, powers, and duties under this 
     Act as the Secretary may deem appropriate, and authorize the 
     redelegation of such functions, powers, and duties by the 
     heads of such departments and agencies.
       ``(b) Transfer Between Departments.--Funds authorized to be 
     appropriated under this Act may be transferred between 
     departments and agencies of the Government, if such funds are 
     used for the purposes for which they are specifically 
     authorized and appropriated.
       ``(c) Funds Transferred From Other Departments and 
     Agencies.--In order to carry out the objectives of this Act, 
     the Secretary may accept transfers of funds from other 
     departments and agencies of the Federal Government if the 
     funds are used for the purposes for which (and in accordance 
     with the terms under which) the funds are specifically 
     authorized and appropriated. Such transferred funds shall 
     remain available until expended, and may be transferred to 
     and merged with the appropriations under the heading 
     `salaries and expenses' by the Secretary to the extent 
     necessary to administer the program.

     ``SEC. 605. PENALTIES.

       ``(a) False Statements; Security Overvaluation.--Whoever 
     makes any statement knowing it to be false, or whoever 
     willfully overvalues any security, for the purpose 
     of obtaining for such person or for any applicant any 
     financial assistance under this Act or any extension of 
     such assistance by renewal, deferment or action, or 
     otherwise, or the acceptance, release, or substitution of 
     security for such assistance, or for the purpose of 
     influencing in any way the action of the Secretary or for 
     the purpose of obtaining money, property, or anything of 
     value, under this Act, shall be fined under title 18, 
     United States Code, imprisoned for not more than 5 years, 
     or both.
       ``(b) Embezzlement and Fraud-Related Crimes.--Whoever, 
     being connected in any capacity with the Secretary in the 
     administration of this Act--
       ``(1) embezzles, abstracts, purloins, or willfully 
     misapplies any moneys, funds, securities, or other things of 
     value, whether belonging to such person or pledged or 
     otherwise entrusted to such person;
       ``(2) with intent to defraud the Secretary or any other 
     body politic or corporate, or any individual, or to deceive 
     any officer, auditor, or examiner, makes any false entry in 
     any book, report, or statement of or to the Secretary or 
     without being duly authorized draws any orders or issues, 
     puts forth, or assigns any note, debenture, bond, or other 
     obligation, or draft, bill of exchange, mortgage, judgment, 
     or decree thereof;
       ``(3) with intent to defraud, participates or shares in or 
     receives directly or indirectly any money, profit, property, 
     or benefit through any transaction, loan, grant, commission, 
     contract, or any other act of the Secretary; or
       ``(4) gives any unauthorized information concerning any 
     future action or plan of the Secretary which might affect the 
     value of securities, or having such knowledge invests or 
     speculates, directly or indirectly, in the securities or 
     property of any company or corporation receiving loans, 
     grants, or other assistance from the Secretary, shall be 
     fined under title 18, United States Code, imprisoned for not 
     more than 5 years, or both.

     ``SEC. 606. EMPLOYMENT OF EXPEDITERS AND ADMINISTRATIVE 
                   EMPLOYEES.

       ``No financial assistance shall be extended by the 
     Secretary under this Act to any business enterprise unless 
     the owners, partners, or officers of such business 
     enterprise--
       ``(1) certify to the Secretary the names of any attorneys, 
     agents, and other persons engaged by or on behalf of such 
     business enterprise for the purpose of expediting 
     applications made to the Secretary for assistance of any 
     sort, under this Act, and the fees paid or to be paid to any 
     such person; and
       ``(2) execute an agreement binding such business 
     enterprise, for a period of 2 years after such assistance is 
     rendered by the Secretary to such business enterprise, to 
     refrain from employing, tendering any office or employment 
     to, or retaining for professional services, any person who, 
     on the date such assistance or any part thereof was rendered, 
     or within the 1-year period ending on such date, shall have 
     served as an officer, attorney, agent, or employee, occupying 
     a position or engaging in activities which the Secretary 
     determines involves discretion with respect to the granting 
     of assistance under this Act.

     ``SEC. 607. MAINTENANCE OF RECORDS OF APPROVED APPLICATIONS 
                   FOR FINANCIAL ASSISTANCE; PUBLIC INSPECTION.

       ``(a) Maintenance of Record Required.--The Secretary shall 
     maintain as a permanent part of the records of the Department 
     of Commerce a list of applications approved for financial 
     assistance under this Act, which shall be kept available for 
     public inspection during the regular business hours of the 
     Department of Commerce.
       ``(b) Posting to List.--The following information shall be 
     posted in such list as soon as each application is approved:
       ``(1) The name of the applicant and, in the case of 
     corporate applications, the names of the officers and 
     directors thereof.
       ``(2) The amount and duration of the financial assistance 
     for which application is made.
       ``(3) The purposes for which the proceeds of the financial 
     assistance are to be used.

     ``SEC. 608. RECORDS AND AUDIT.

       ``(a) Recordkeeping and Disclosure Requirements.--Each 
     recipient of assistance under this Act shall keep such 
     records as the Secretary shall prescribe, including records 
     which fully disclose the amount and the disposition by such 
     recipient of the proceeds of such assistance, the total cost 
     of the project or undertaking in connection with which such 
     assistance is given or used, and the amount and nature of 
     that portion of the cost of the project or undertaking 
     supplied by other sources, and such other records as will 
     facilitate an effective audit.
       ``(b) Access to Books for Examination and Audit.--The 
     Secretary, the Inspector General of the Department of 
     Commerce, and the Comptroller General of the United States, 
     or any of their duly authorized representatives, shall have 
     access for the purpose of audit and examination to any books, 
     documents, papers, and records of the recipient that are 
     pertinent to assistance received under this Act.

     ``SEC. 609. PROHIBITION AGAINST A STATUTORY CONSTRUCTION 
                   WHICH MIGHT CAUSE DIMINUTION IN OTHER FEDERAL 
                   ASSISTANCE.

       ``All financial and technical assistance authorized under 
     this Act shall be in addition to any Federal assistance 
     previously authorized, and no provision of this Act shall be 
     construed as authorizing or permitting any reduction or 
     diminution in the proportional amount of Federal assistance 
     which any State or other entity eligible under this Act would 
     otherwise be entitled to receive under the provisions of any 
     other Act.

     ``SEC. 610. ACCEPTANCE OF APPLICANTS' CERTIFICATIONS.

       ``The Secretary may accept, when deemed appropriate, the 
     applicants' certifications to meet the requirements of this 
     Act.

                          ``TITLE VII--FUNDING

     ``SEC. 701. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     Act $397,969,000 for fiscal year 1999 and such sums as may be 
     necessary for each of fiscal years 2000 through 2002, such 
     sums to remain available until expended.

     ``SEC. 702. DEFENSE CONVERSION ACTIVITIES.

       ``In addition to the appropriations authorized by section 
     701, there are authorized to be appropriated to carry out 
     this Act such sums as may be necessary to provide assistance 
     for defense conversion activities. Such funding may include 
     pilot projects for privatization and economic development 
     activities for closed or realigned military or Department of 
     Energy installations. Such sums shall remain available until 
     expended.

     ``SEC. 703. DISASTER ECONOMIC RECOVERY ACTIVITIES.

       In addition to the appropriations authorized by section 
     701, there are authorized to be appropriated to carry out 
     this Act such sums as may be necessary to provide assistance 
     for disaster economic recovery activities. Such sums shall 
     remain available until expended.''

     SEC. 3. SAVINGS PROVISIONS.

       (a) Existing Rights, Duties, and Obligations Not 
     Affected.--This Act shall not be construed as affecting the 
     validity of any right, duty, or obligation of the United 
     States or any other person arising under or pursuant to any 
     contract, loan, or other instrument or agreement which was in 
     effect on the day before the effective date of this Act.
       (b) Continuation of Suits.--No action or other proceeding 
     commenced by or against any officer or employee of the 
     Economic Development Administration shall abate by reason of 
     the enactment of this Act.
       (c) Liquidating Account.--The Economic Development 
     Revolving Fund hitherto established under section 203 of the 
     Public Works and Economic Development Act of 1965 shall 
     continue to be available to the Secretary as a liquidating 
     account as defined under section 502 of the Federal Credit 
     Reform Act of 1990 for payment of obligations and expenses in 
     connection with financial assistance extended under this Act, 
     said Act of 1965, the Area Redevelopment Act, and the Trade 
     Act of 1974.
       (d) Administration.--The Secretary shall take such actions 
     as authorized before the effective date of this Act as 
     necessary or appropriate to administer and liquidate existing 
     grants, contracts, agreements, loans, obligations, 
     debentures, or guarantees heretofore made by the Secretary or 
     the Secretary's delegatee pursuant to provisions in effect 
     immediately prior to the effective date of this Act.

[[Page S760]]

     
                                  ____
                      Section-by-Section Analysis

     Section 1. Short title; effective date
       Act may be cited as the ``Economic Development Partnership 
     Act of 1997'', with an effective date not later than three 
     months after enactment.
     Section 2. Reauthorization of Public Works and Economic 
         Development Act of 1965
       Reenacts the Public Works and Economic Development Act of 
     1965 (PWEDA), replacing everything after section 1 of that 
     act with Findings and the following seven titles:
     Sec. 2. Findings and declaration
       Includes Congressional findings and declaration of the need 
     for Federal assistance to distressed areas, as in PWEDA.


TITLE I--ECONOMIC DEVELOPMENT PARTNERSHIPS COOPERATION AND COORDINATION

     Sec. 101. Establishment of economic development partnerships
       Directs cooperation with States and other entities, 
     including cooperative agreements with adjoining states; 
     technical assistance as appropriate; and intergovernmental 
     review of project proposals.
     Sec. 102. Cooperation of Federal agencies
       Directs other Federal department and agency to cooperate 
     with the Secretary in carrying out the objectives of this 
     Act, as in PWEDA.
     Sec. 103. Coordination
       Directs the Secretary to coordinate the activities under 
     this Act with other Federal programs, States, economic 
     development districts, and others, as in PWEDA.
     Sec. 104. National Advisory Committee
       The Secretary may appoint a broad-based 25-member National 
     Public Advisory Committee on Regional Economic Development to 
     make recommendations to the Secretary relative to carrying 
     out the Secretary's duties under this Act, as in PWEDA.


       TITLE II--GRANTS FOR PUBLIC WORKS AND ECONOMIC DEVELOPMENT

     Sec. 201. Public works grants
       Provides authority to make grants for regular 
     infrastructure projects similar to those under PWEDA, and 
     adds authority to make grants for design and engineering 
     projects.
     Sec. 202. Construction cost increases
       Provides for increases in grant funding due to construction 
     cost increases, using essentially the same language as in 
     Title I of PWEDA.
     Sec. 203. Planning and administrative expenses
       Provides for grant assistance to political entities and 
     planning organizations using essentially the same language as 
     in Title III of PWEDA.
     Sec. 204. Cost sharing
       Establishes a 50 percent direct grant rate for projects 
     under this title and requirements for the non-Federal share, 
     as in PWEDA.
     Sec. 205. Supplementary grants
       Provides authority to supplement grants from designated 
     Federal grant-in-aid programs as well as authority to 
     supplement the 50 percent direct grant rate for eligible 
     projects under this Act of 1997. Similarly to PWEDA, grant 
     rate may be increased to 80 percent according to distress 
     criteria, and 100 percent in extraordinary situations.
     Sec. 206. Regulations to assure relative needs are met
       Directs the Secretary to prescribe rules, regulations, and 
     procedures to carry out this title which will assure that for 
     assistance under section 201 adequate consideration is given 
     to the relative needs of eligible areas, as in PWEDA. 
     Relevant factors are to include severity of unemployment and 
     underemployment, income levels, and outmigration of 
     population.
     Sec. 207. Training, research and technical assistance
       Provides authority to make direct grants for training, 
     research and technical assistance, including program 
     evaluation and economic impact analyses, as well as authority 
     to conduct research and technical assistance through staff, 
     through other Federal departments or agencies, or through 
     contracts or grants. Authority is similar to PWEDA's.
     Sec. 208. Relocation of individuals and businesses
       States that grants to eligible recipients must include 
     relocation assistance to affected persons, as required by the 
     Uniform Relocation Assistance and Real Property Acquisition 
     Act of 1970, as amended.
     Sec. 209. Economic adjustment
       Provides authority, as in PWEDA, to make direct grants for 
     public facilities, public services, business development 
     (including a revolving loan fund), planning, technical 
     assistance, and training, including activities to alleviate 
     long-term economic deterioration, and sudden and severe 
     economic dislocations.
     Sec. 210. Direct expenditure or redistribution by recipient
       Provides, as in PWEDA, that amounts from grants under 
     section 209 of this title may be used in direct expenditures 
     or through redistribution to public and private entities in 
     grants, loans, loan guarantees, to reduce loan guarantee 
     interest, or other appropriate assistance, but no grant shall 
     be made by a recipient to a private profit-making entity.
     Sec. 211. Changed project circumstances
       Provides authority to approve changes in project scope.
     Sec. 212. Use of funds in projects constructed under 
         projected cost
       Provides that funds available because of construction 
     projects completed under cost may be used to further improve 
     the project, as determined by the Secretary.
     Sec. 213. Base closings and realignments
       Provides authority for assistance under this title due to 
     the closure or realignment of a military or Department of 
     Energy installation for projects to be carried out on such 
     installation or in communities adversely affected by the 
     closure or realignment.
     Sec. 214. Prevention of unfair competition
       Prohibits use of funds under this Act for any project 
     resulting in excess capacity using the same language in 
     section 702 of PWEDA.
     Sec. 215. Reports by recipient
       Requires reports from recipients of assistance containing 
     an evaluation of the effectiveness of the economic assistance 
     provided under this Act.


    TITLE III--DEFINITIONS, ELIGIBILITY AND COMPREHENSIVE ECONOMIC 
                         DEVELOPMENT STRATEGIES

     Sec. 301. Definitions
       Defines eligible recipient as an area described in Section 
     302(a), an economic development district designated under 
     section 401, an Indian tribe, a State, a city or other 
     political subdivision (subdivision) of a State or a 
     consortium of such subdivisions, an institution of higher 
     education or a consortium of such institutions, or a public 
     or private nonprofit organization or association acting in 
     cooperation with officials of such subdivisions, and includes 
     private individuals and for-profit organizations for grants 
     under section 207. The terms economic development district, 
     economic development center, grant, Indian tribe, Secretary 
     and State are also defined.
     Sec. 302. Area eligibility
       Allows for self-certification by applicants seeking 
     assistance under section 201 or 209, that they meet one or 
     more of the nine distress criteria established; such 
     certification to be supported by Federal data, when available 
     or, in the absence of recent Federal data, by data available 
     through the State government. Such documentation shall be 
     accepted by the Secretary unless the Secretary determines the 
     documentation to be inaccurate. The most recent statistics 
     available shall be used. Area eligibility is similar to that 
     in PWEDA (however, determined at time of application, rather 
     than ``grandfathered''), but provides consistency across 
     programs, and simplifies process of determining eligibility.
     Sec. 303. Comprehensive economic development strategy
       Requires applicants for assistance under section 201 or 209 
     (except for planning) to prepare a comprehensive economic 
     development strategy, acceptable to the Secretary, 
     identifying problems to be addressed and the strategy for 
     addressing them. This is similar to overall economic 
     development program required for PWEDA public works grants, 
     or adjustment strategies required for PWEDA economic 
     adjustment grants. Provides that plan prepared under another 
     Federally supported program may be acceptable.


                TITLE IV--ECONOMIC DEVELOPMENT DISTRICTS

     Sec. 401. Designation of economic development districts and 
         economic development centers
       Establishes criteria for the designation of economic 
     development districts and economic development centers, with 
     essentially the same language as in PWEDA.
     Sec. 402. Termination or modification
       Authorizes the Secretary to issue regulations describing 
     standards for terminating or modifying designated economic 
     development districts and economic development centers, as in 
     PWEDA.
     Sec. 403. Bonus
       Provides authority to increase the amount of grant 
     assistance authorized by sections 204 and 205 for projects 
     within designated economic development districts by an amount 
     not to exceed 10 per centum of the aggregate cost of any such 
     project, subject to minimum non-Federal share, if certain 
     requirements are met, as in PWEDA.
     Sec. 404. Strategy provided to Appalachian Regional 
         Commission
       As in PWEDA, requires that each economic development 
     district provide a copy of its comprehensive economic 
     development strategy to the Appalachian Regional Commission, 
     if any part of such proposed district is within the 
     Appalachian region.
     Sec. 405. Parts not within areas described in section 302(a)
       Establishes the authority to provide the financial 
     assistance to those parts of an economic development district 
     which are not within an area described in section 302(a), 
     when such assistance will be of a substantial direct benefit 
     to an area described in section 302(a) within such district, 
     as in PWEDA.


                        TITLE V--ADMINISTRATION

     Sec. 501. Assistant Secretary for Economic Development
       Provides that the Secretary will administer the Act with 
     the assistance of an Assistant Secretary of Commerce for 
     Economic Development to be appointed by the President by and 
     with the advice and consent of

[[Page S761]]

     the Senate; such Assistant Secretary of Commerce for Economic 
     Development will serve as the administrator of the Economic 
     Development Administration.
     Sec. 502. Economic development information clearinghouse
       Establishes a central information clearinghouse on matters 
     relating to economic development, economic adjustment, 
     disaster recovery, and defense conversion programs and 
     activities of the Federal and State governments, including 
     political subdivisions of the States.
     Sec. 503. Consultation with other persons and agencies
       Authorizes the Secretary to confer with any persons, 
     including representatives of labor, management, agriculture, 
     and government, who can assist with the problems of area and 
     regional unemployment and underemployment, and to consult 
     with interested departments and agencies as deemed 
     appropriate in the performance of the functions vested in the 
     Secretary by this Act, as in PWEDA.
     Sec. 504. Administration, operation, and maintenance
       Requires finding that the project for which Federal 
     assistance is granted will be properly and efficiently 
     administered, operated, and maintained, using the same 
     language as in section 604 of PWEDA.
     Sec. 505. Firms desiring Federal contracts
       Provides, as in PWEDA, that the Secretary may furnish the 
     procurement divisions of the various departments, agencies, 
     and other instrumentalities of the Federal Government with a 
     list containing the names and addresses of business firms 
     which are located in areas of high economic distress and 
     which are desirous of obtaining Government contracts for the 
     furnishing of supplies or services.
     Sec. 506. Amendment to title 5, U.S.C.
       Amends Section 5316 of title 5, United States Code, by 
     striking ``Administrator for Economic Development''.


                        TITLE VI--MISCELLANEOUS

     Sec. 601. Powers of Secretary
       Provides numerous powers to the Secretary, substantially 
     similar to the authority under PWEDA, to carry out the 
     Secretary's duties under this Act, including but not limited 
     to those involving a seal, personnel, hearings, the taking of 
     appropriate actions concerning personal property, real 
     property, or evidence thereof, third party claims, the 
     establishment of performance measures for grants and other 
     assistance provided under this Act, and the establishment of 
     such rules, regulations, and procedures as the Secretary 
     considers appropriate in carrying out the provisions of this 
     Act. It includes authority for the Secretary to protect 
     Governmental interest in grant property and to release that 
     interest 20 years after disbursement.
     Sec. 602. Maintenance of standards
       Directs the Secretary to continue to implement and enforce 
     the provisions of section 712 of PWEDA.
     Sec. 603. Annual report to Congress
       Provides for one annual consolidated report to Congress on 
     the Secretary's activities under this Act, as required under 
     PWEDA.
     Sec. 604. Use of other facilities
       Substantially as in PWEDA, provides authority for the 
     Secretary to: delegate to the heads of other departments and 
     agencies of the Federal Government any of the Secretary's 
     functions, powers, and duties under this Act as deemed 
     appropriate and to authorize redelegation by such heads; 
     transfer funds between departments and agencies of the 
     Government, if such funds are used for the purposes for which 
     they are specifically authorized and appropriated; accept 
     transfers of funds from other departments and agencies of the 
     Federal Government if the funds are used for the purposes for 
     which such funds are specifically authorized and 
     appropriated.
     Sec. 605. Penalties
       Provides legal penalties using essentially the same 
     language as in section 710 of PWEDA.
     Sec. 606. Employment of expediters and administrative 
         employees
       Provides requirements concerning the employment of 
     expediters and administrative employees, as in section 711 of 
     PWEDA.
     Sec. 607. Maintenance of records of approved applications for 
         financial assistance; public inspection
       Directs the Secretary, as in PWEDA, to maintain as a 
     permanent part of the records of the Department of Commerce a 
     list of applications approved for financial assistance under 
     this Act and to make such records available for public 
     inspection during the regular business hours of the 
     Department of Commerce.
     Sec. 608. Records and audit
       Requires that recipients keep records and provide access 
     for audits using language similar to that in section 714 of 
     PWEDA.
     Sec. 609. Prohibition against a statutory construction which 
         might cause diminution in other Federal assistance
       As in PWEDA, provides that financial and technical 
     assistance authorized under this Act be in addition to any 
     Federal assistance previously authorized, and no provision of 
     this Act be construed as authorizing or permitting any 
     reduction or diminution in the proportional amount of Federal 
     assistance which an entity would otherwise receive.
     Sec. 610. Acceptance of applicants' certifications
       Provides authority for the Secretary to accept, when deemed 
     appropriate, the applicants' certifications to meet the 
     requirements of this Act.


                           TITLE VII--FUNDING

     Sec. 701. Authorization of appropriations
       Authorizes $343,028,000 for fiscal year 1998 and such sums 
     as may be necessary for each of fiscal years 1999 through 
     2002, such sums to remain available until expended.
     Sec. 702. Defense conversion activities
       In addition to the appropriations authorized by section 
     701, authorizes to be appropriated to carry out this Act such 
     sums as may be necessary to provide assistance for defense 
     conversion activities.
     Sec. 703. Disaster economic recovery activities
       In addition to the appropriations authorized by section 
     701, authorizes to be appropriated to carry out this Act such 
     sums as may be necessary to provide assistance for disaster 
     economic recovery activities.
     Section 3. Savings provisions
       Provides that existing rights, duties and obligations, and 
     pending suits, are not to be affected by this Act, and that 
     revolving fund established under section 203 of PWEDA is to 
     continue to be available as a liquidating account.

  Ms. SNOWE. Mr. President, I rise today with my distinguished 
colleague from Montana, Senator Max Baucus, to introduce the ``Economic 
Development Partnership Act of 1998''--a bill to reauthorize the 
Economic Development Administration in the Department of Commerce. I 
would first like to thank the ranking member of the Senate Committee on 
Environment and Public Works, Senator Baucus, for his ongoing 
commitment to this vital agency, and would also like to thank the 
bipartisan group of Senators who have joined us in sponsoring this 
legislation.
  Mr. President, I have long been a supporter of the EDA because--
although it is a small agency--its programs contribute significantly to 
economic growth and job expansion. With only a modest annual 
appropriation and a national staff of 258 dedicated public servants, 
the EDA successfully assists communities across the nation who have 
experienced economic distress. Economic distress that is not only 
generated by economic downturns, but also by natural disasters--such as 
storms and earthquakes--and un-natural disasters, such as military base 
closings.
  I am also pleased that, at a time when Congress is exercising much 
needed fiscal discipline and performance-based budgeting is being 
demanded from all agencies, the EDA has maintained its commitment to 
providing a good return on the public dollar. Specifically, recent 
studies of EDA's programs were performed by a consortia of 
organizations including Rutgers University, the New Jersey Institute of 
Technology, Columbia University, Princeton University, the National 
Association of Regional Councils, and the University of Cincinnati. The 
results of these studies were impressive, and clearly showed the value 
and results of EDA investments in public works and defense conversion 
activities. Specifically, for every every $1 million that EDA invests 
in public works projects, 327 jobs are created or retained at a cost of 
$3,058 per job; 15 construction jobs are created; $10 million in 
private sector dollars are leveraged; and $10.13 million is added to 
the local tax base. Based on these statistics, I believe it's safe to 
say that EDA delivers a substantial ``bang for the buck''!
  Even as these statistics speak to the value of EDA programs 
nationally, I am pleased that the people of Maine don't need to hear 
what is happening in other states to be convinced of the value of EDA--
they already know what this agency has meant to their towns and 
communities. Over the past 32 years, the EDA has invested more than 
$198 million in 606 projects across the state. Through public works, 
technical assistance, planning, community investments, and revolving 
loan fund programs, the EDA has established local partnerships in Maine 
that have provided critical infrastructure development and other 
economic incentives that have stimulated local growth, created jobs, 
and generated revenue.
  Not only has the EDA invested in many economic development projects 
in Maine, but I can also personally attest to the value and importance 
of

[[Page S762]]

these projects because I have seen the results that they deliver. For 
example, as a result of EDA assistance in 1996, dormitories at the 
Maine School of Science and Mathematics--a magnet school built at 
former Loring Air Force Base--were built to house the school's 
students. And in 1995, EDA assistance in Freeport, Maine prevented a 
major health maintenance organization from relocating to another state. 
That project alone not only saved 99 jobs, but also created an 
additional 127 in the community.
  Mr. President, I cite these success stories not only to credit the 
agency for a job well done in my state, but to demonstrate to my 
colleagues the types of assistance that have likely been provided to 
their states as well. If my colleagues would review the cases of 
economic distress that have occurred in their own states, I believe 
they will find their own success stories that speak to the value of EDA 
to their constituents.
  Therefore, I would urge that my colleagues support the bill that 
Senator Baucus and I are introducing today because it would reauthorize 
the beneficial and critically-needed programs that have led to these 
success stories for an additional five years. Perhaps most importantly, 
it will keep the agency's successful programs intact, while 
incorporating ideas and concepts for improvement that have received 
increased attention and support in the Congress. For instance, many of 
my colleagues would agree that to be truly successful, government 
programs should proceed in partnership with local governments--and this 
legislation will do just that by preserving the integrity of the 
agency's traditional programs, while expanding and modifying them to 
encompass the partnership concept.
  The bill also contains new language that reflects some of the 
activities that the agency has become more involved in over the past 
few years, such as defense conversion and disaster assistance. From 
Maine's perspective, these programs could not be buttressed soon enough 
following the closing of Loring Air Force base in 1994, and the ice 
storms that ravaged the state just weeks ago.
  In addition, there are other provisions in this legislation that will 
bring meaningful, positive changes to EDA's programs by increasing 
program flexibility and heightening accountability. Ultimately, it is 
these types of changes that will not only update an Act that has been 
in need of reauthorization, but will also prepare this agency for the 
economic needs and demands of our nation as we approach a new century.
  Mr. President, the Economic Development Administration is a key 
federal agency that promotes economic growth and development, and the 
legislation we are offering today will ensure that these improved 
programs will be available for the next five years. I urge my 
colleagues to support this critically needed legislation.
  Mr. KENNEDY. Mr. President, it is an honor to join as a sponsor of 
the Economic Development Partnership Act of 1998, which will 
reauthorize and extend the important work of the Economic Development 
Administration in the Department of Commerce.
  The Economic Development Administration was established in 1965 to 
provide grants to help hard-pressed communities in all parts of the 
country to deal more effectively with conditions of persistent 
unemployment in economically distressed areas.
  Over the past thirty years, EDA has helped generate new jobs, retain 
existing jobs, and stimulate industrial and commercial growth in 
economically distressed areas across the country. By making assistance 
available to areas suffering high unemployment, low-income levels, or 
sudden and severe economic emergencies, EDA provides local governments 
with the resources to revitalize their communities, create jobs, and 
plan for long-term growth.
  In fulfilling its mission, EDA is guided by the basic principle that 
distressed communities must be encouraged to plan and implement their 
own economic development and revitalization strategies.
  I commend Senator Baucus and the Clinton Administration for their 
leadership on this important legislation, and I look forward to its 
enactment.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Ms. Collins, and Mr. Enzi):
  S. 1648. A bill to amend the Public Health Service Act and the Food, 
Drug and Cosmetic Act to provide for reductions in youth smoking, for 
advancements in tobacco-related research, and the development of safer 
tobacco products, and for other purposes; to the Committee on Labor and 
Human Resources.


               preventing addiction of smoking teens act

  Mr. JEFFORDS. Mr. President, I rise today to introduce legislation 
with one principal aim: to put an end to teenage smoking. I am honored 
to be joined by two other distinguished members of the Committee on 
Labor and Human Resources, Senator Collins, and Senator Enzi.

  By now, we are all familiar with the grim statistics that tell the 
story of youth smoking in our country--the thousands of children that 
experiment with tobacco, the thousands that become addicted, and the 
thousands who will die prematurely as a result.
  For too long, the federal government has been of little assistance in 
combating the number one preventable disease in this country. Apart 
from the efforts of Surgeons General from Luther Terry to C. Everett 
Koop, and sporadic efforts by Congress, the federal government has 
barely acknowledged there's a problem.
  The states, especially my home state of Vermont, have been leaders in 
the effort to end teenage smoking. And last summer, the proposed 
settlement by the Attorneys General ignited a whole new debate on this 
issue by providing us with a template for action.
  Eight months later, it is easy for us to minimize that 
accomplishment, but by any fair appraisal the settlement was a 
tremendously important step.
  When the tobacco settlement was announced, some people thought it 
might be only a few months before it would be ratified by Congress. 
Today, people wonder whether it can be revived by Congress.
  I am confident that we can and will reach agreement on a national 
tobacco policy. But I am just as certain that we'll never do so if we 
pursue a partisan approach.
  Since the settlement, the Committee on Labor and Human Resources has 
held four hearings on this subject, and across Capitol Hill dozens of 
hearings have been held by other committees of jurisdiction.
  Today we take the next important step in this process, by introducing 
legislation that I hope will serve as the basis for a broad, bipartisan 
approach to the three basic public health issues of a national tobacco 
policy: prevention, safer products, and cessation.
  If we can achieve a national tobacco policy, it could be the biggest 
public health breakthrough ever achieved outside a lab.
  The settlement has been criticized as being too weak by some, too 
ambitious by others. I agree the settlement has flaws.
  But I think we must never lose sight of the ultimate goal--what is 
the best public health approach that we can enact to reduce teen 
smoking?
  I am less concerned about exacting the last measure of revenge for 
the past actions of the tobacco companies than I am about ensuring the 
future of the children who become addicted every day. We need to keep 
our priorities straight.
  It will take a broad, bipartisan consensus to pass tobacco 
legislation. Right now, that consensus seems entirely absent and is in 
danger of slipping into partisan grand standing over who loves kids and 
hates tobacco.
  That consensus can only come through compromise. There will be many 
opportunities to derail legislation of this magnitude if it is only 
supported by a slim majority. If we expect enactment, we must forge 
broad agreement in the Congress.
  The legislation we introduce today, called the Preventing Addiction 
to Smoking Among Teens, or PAST Act, will enact and improve upon the 
public health provisions of the tobacco settlement. It is not designed 
to solve every question before us, rather, it addresses the public 
health issues that are before the Labor Committee.
  It is no longer feasible for tobacco to escape the same type of 
regulation we require for foods and medicines. Our bill will give the 
Food and Drug Administration every bit of authority it needs to 
regulate tobacco products and their components. The tobacco industry 
will have to turn over all of its

[[Page S763]]

health documents to the FDA. FDA will be able to reduce or eliminate 
harmful ingredients or require safer technological improvements through 
informal rulemaking to achieve overall public health benefits.
  Of course, we will not achieve the public health benefits we seek 
from mandating safer products if the resulting products are 
unacceptable to consumers who can't quit smoking. Part of the process 
for setting these standards will be consideration of just this 
question.
  We encourage the development of safer products subject to the same 
type of scientific review for other FDA regulated products. And FDA can 
propose, after ten years, the outright prohibition of cigarettes or 
smokeless tobacco products.
  But our bill will not permit FDA to ban cigarettes or smokeless 
tobacco for adult usage on its own. That decision, in my opinion, is 
one that should be made by Congress, not a single government agency.
  Our bill adopts a comprehensive approach to preventing teens from 
smoking, and helping people to quit who are already hooked. And 
finally, our bill will provide for a coordinated regime to research the 
many unanswered questions about tobacco, its effects on us, and how to 
mitigate those effects.
  I ask unanimous consent that a summary of our bill be included at the 
end of my remarks.
  Next week, Senator Gregg and I will hold a hearing in New Hampshire 
to listen to state and local concerns on tobacco issues within the 
jurisdiction of the Senate Committee on Labor and Human Resources. And 
in a month, I hope to have found bipartisan support for my bill and to 
have moved it through the committee.
  Finally, I want to note that many of my colleagues are also working 
on legislation to help move the discussion forward, and there are many 
good ideas that deserve consideration. In particular, I look forward to 
working with Senator Enzi on his proposal to establish a fund supported 
by tobacco industry resources. This fund would be a sustainable way to 
provide compensation for treating tobacco-related diseases, and could 
also be used to pay for some of the prevention proposals I have 
outlined in my bill
  Even though we have much work to do before we decide the overall 
architecture of tobacco policy, it is not at all too soon to begin 
pouring the foundation. As in New England, we have a short building 
season. If we are to clear the committees, combine our approaches, 
clear the floor and conference, we must act now. I urge my colleagues 
to give me their support, and greatly appreciate those who have already 
done so.
  We need to make teen smoking a thing of the past.
  Mr. President, I ask unanimous consent that bill summary be printed 
in the Record.
  There being no objection, the bill summary was ordered to be printed 
in the Record, as follows:

  The Preventing Addiction to Smoking Among Teens (PAST) Act--Overview


                                Problem

       Smoking is the single most preventable cause of death in 
     the United States.
       Smoking-related diseases kill 400,000 Americans each year.
       82% of adult smokers began smoking when they were 
     teenager--people generally do not start smoking past the teen 
     years, making it imperative to prevent smoking among teens.
       But the trend is going in the wrong direction: more kids 
     are smoking; 6,000 kids a day try a cigarette, and 3,000 of 
     those will become addicted; every day, 1,000 kids who start 
     smoking will eventually die prematurely due to smoking.


                              The PAST Act

       Across the board, the provisions of the PAST Act are 
     tougher than those approved by the Attorneys General and 
     plaintiffs' attorneys in the June 20, 1997 proposed tobacco 
     settlement. The PAST Act:
       Is a comprehensive public health approach to reduce youth 
     smoking, help people who want to quit, bring safer products 
     to the market, and provide for the research we need to 
     improve our understanding of addiction and how to prevent it.
       Requires that tobacco settlement funds be used for tobacco-
     related initiatives.
       Provides for: Straightforward and effective authority for 
     FDA to regulate tobacco products; tough and enforceable 
     restrictions on youth access to tobacco products; evidence-
     based prevention and cessation programs; research that will 
     help us understand why certain people become addicted to 
     tobacco products and provide science-based methods to prevent 
     addiction.


                           Summary of the Act

     1. Regulation of Tobacco Products and Tobacco Product 
         Development
       Purpose: To provide strong and effective Food and Drug 
     Administration (FDA) regulatory authority over cigarettes, 
     smokeless tobacco products, and safer tobacco products.
       Summary: No longer will the tobacco companies be exempt 
     from the type of regulation which ensures that our foods and 
     medicines are safe and properly labeled.
       The PAST Act gives FDA regulatory authority to:
       Oversee the manufacturing processes of tobacco products;
       require elimination of tobacco product additives and 
     reductions in nicotine;
       quickly and easily promulgate performance standards to 
     ensure that new and safer technology reaches consumers with 
     truthful information on health issues related to products;
       regulate the content of product labels and advertising;
       require tobacco companies to divulge all health-related 
     research on tobacco products and ingredients;
       set national rules for product regulation while preserving 
     important state and local authorities to require tougher 
     requirements for youth access rules and point-of-sale 
     advertising;
       periodically assess and improve the effectiveness of 
     tobacco product warning labels.
       The PAST Act bans billboard advertising of tobacco 
     products, cartoon figure and human figures (like Joe Camel 
     and the Marlboro Man) and restricts in-store marketing.
       The PAST Act does not preempt the ability of state or 
     localities to pass stricter laws on sale to minors or point-
     of-sale advertising.
       1. FDA Authority to Approve Reduced Risk Tobacco Products 
     and Require Reductions in Nicotine and Elimination of Tobacco 
     Product Hazards.
       50 million Americans smoke. For those who can't quit as 
     soon as they'd like, we must both provide them with less 
     harmful alternatives to today's tobacco products and take 
     steps immediately to reduce the danger in existing tobacco 
     products. The PAST Act establishes science and public health-
     based decision making at FDA to achieve these goals.
       The PAST Act includes a program designed to encourage 
     tobacco companies to develop and market reduced risk tobacco 
     products. FDA authority over reduced risk tobacco products 
     requires that FDA approve specific ``reduced risk'' claims 
     manufacturers make. In addition, manufacturers must notify 
     FDA of any reduced risk technology they develop or acquire.
       FDA is to require tobacco companies to conduct the same 
     type of high quality scientific studies expected of drug and 
     device companies to demonstrate that a new tobacco product 
     carries a ``reduced risk.'' FDA will take into account the 
     effect of the product on overall public health concerns 
     including whether fewer people will quit smoking as a result 
     of its availability. FDA will require both short-term and 
     long-term studies to ensure that the products have a positive 
     public health effect. FDA can revoke the approval to market 
     the product if the studies do not support the health claims 
     or if the studies are not completed in a timely manner.
       In addition, if FDA determines that a particular reduced 
     risk technology is less hazardous it may: require disclosure 
     of the safer technology; prohibit the use of technology that 
     is superseded by the new technology, or; require that 
     manufacturers stop selling tobacco products that do not 
     incorporate such technology.
       In addition to reviewing reduced risk products, FDA has 
     authority to mandate the elimination of hazardous components 
     of tobacco products and reduce nicotine levels to achieve 
     overall public health benefits. Before requiring changes to 
     tobacco products, FDA will employ a notice and comment 
     rulemaking proces--the same as that used for drugs and 
     devices. FDA is not! required to prove that a black market 
     will not result.
       2. FDA Authority to Regulate Product Labels, Warnings, 
     Advertising, and Marketing.
       The PAST Act will enact: new warning labels, and the 
     flexibility for the Secretary to change the labels; 
     restrictions on labeling and advertising of tobacco products; 
     restrictions on advertising in non-adult media and 
     glamorization of tobacco; bans on non-tobacco items and event 
     sponsorship.
       The PAST Act does not prevent states and localities from 
     enacting tougher laws on youth access and point-of-sale 
     cigarette advertising and marketing.
     II. National Efforts to Reduce Youth Smoking
       Purpose: To provide all the essential ingredients for 
     comprehensive and effective programs to reduce youth smoking.
       Summary: The PAST Act sets high but achievable goals to 
     reduce youth smoking. To ensure that the tobacco 
     manufacturers partner with communities to achieve these 
     goals, the PAST Act exacts tough penalties on the industry if 
     goals are not met. Further, unlike the June 20 proposed 
     tobacco settlement, and some other bills that have been 
     introduced, the PAST Act does not permit the penalties to be 
     capped, and it ensures that the penalties are calculated 
     accurately.
       The PAST Act entrusts the states with the necessary 
     resources from the Tobacco Settlement Trust Fund for local 
     anti-tobacco

[[Page S764]]

     programs that will effectively: restrict the sale of tobacco 
     products to minors; prevent youth smoking; assure that people 
     who want to quit smoking can get proven cessation treatment.
       The PAST Act gives the Office on Smoking and Health of 
     Centers for Disease Control the resources to provide 
     oversight and technical help to state and local authorities, 
     thus guaranteeing that the latest and most effective 
     strategies to prevent and stop smoking can be employed.
       The PAST Act provides funds for research to help us 
     understand addiction to tobacco products, and to ensure that 
     the results of this research are swiftly incorporated into 
     community-based programs.
       The PAST Act establishes an innovative and far-reaching 
     national public health promotion and health education 
     campaign on the dangers of smoking.
       1. Required Reduction in Underage Use of Tobacco Products.
       Purpose: To promote an immediate reduction in the number of 
     underage consumers of tobacco products by imposing financial 
     surcharges dramatically stiffer than the June 20 proposed 
     tobacco settlement on participating manufacturers if underage 
     tobacco-use reduction targets are not met.
       If the targets are not met, surcharges will be imposed on 
     manufacturers, and for each 5 percentage points short of the 
     target, the surcharge on manufacturers increases 
     substantially.
       Cigarettes: for the first 5 percentage points for which the 
     rate of youth smoking falls short of the target: the product 
     of $80,000,000 and the number of applicable percentage 
     points; for 6 to 10 percentage points short of the goal: the 
     product of $400,000,000 and the number of applicable 
     percentage points; for 11 or more percentage points short of 
     the goal: the product of $500,000,000 and the number of 
     applicable percentage points.
       Smokeless Tobacco Products: for the first 5 percentage 
     points for which the rate of youth smokeless tobacco use 
     falls short of the target: the product of $15,000,000 and the 
     number of applicable percentage points; for 6 to 10 
     percentage points short of the goal: the product of 
     $30,000,000 and the number of applicable percentage points; 
     for 11 or more percentage points short of the goal: the 
     product of $45,000,000 and the number of applicable 
     percentage points.
       Targets for reduction of tobacco product use in individuals 
     under 18:
       Cigarettes: 30 percent in the fifth and sixth years; 50 
     percent in the seventh, eighth and ninth years; 60 percent in 
     the tenth and subsequent years.
       Smokeless tobacco: 25 percent in the fifth and sixth years; 
     35 percent in the seventh, eighth and ninth years; 45 percent 
     in the tenth and subsequent years.
       2. Restrictions on Access to Tobacco Products.
       Purpose: To ensure that strict state laws are passed and 
     enforced that will prohibit the sale and distribution of 
     tobacco products to minors, and to provide civil penalties to 
     minors who purchase or smoke tobacco products.
       State laws must include the following provisions, and may 
     include stricter provisions:
       At least 90% of minors attempts to purchase must be 
     unsuccessful; requirement of a state or local license to sell 
     tobacco products; a prohibition on sale of cigarettes and 
     smokeless tobacco to individuals under 18 years of age; the 
     following requirements for distribution:
       The licensee must verify age through a government issued 
     photo identification; no verification is required for any 
     individual who is at least 27 years of age; no direct access 
     to tobacco products; face-to-face exchange for purchase; no 
     out-of-package sale of tobacco products; no special marketing 
     rules for adult only stores; minors may not purchase or 
     consume tobacco products. States may enforce this provision 
     through civil penalties, including a written warning, a 
     possible fine of up to $150 for repeated offenses, or other 
     civil penalties determined appropriate by the state.
       3. State and Community Action Programs.
       Purpose: To promote the development of state and community 
     action programs designed to educate the public on addiction 
     and the hazards of tobacco use, and to promote prevention and 
     cessation of the use of tobacco products.
       Funds will be available to each state from the Tobacco 
     Settlement Trust Fund after approval of a state plan. Funding 
     increases from $145,000,000 for each of the fiscal years 1999 
     and 2000 to $440,000,000 for fiscal year 2008.
       State and local initiatives may include: evidence-based 
     programs to prevent tobacco use and promote cessation; health 
     education and promotion efforts relating to tobacco use; 
     public policy initiatives to prevent tobacco use and promote 
     cessation; evidence-based programs in schools to prevent and 
     reduce tobacco use and addiction.
       4. Tobacco Use Cessation Programs.
       Purpose: to help addicted individuals who want to quit.
       Funding allocated to the states from the Tobacco Settlement 
     Trust Fund: $1,000,000,000 for each of the fiscal years 1999 
     through 2002; $1,500,000,000 for each of the fiscal years 
     2003 through 2008.
       Programs to be funded may include: evidence-based programs 
     designed to assist individuals to stop their use of tobacco 
     products; training for health care providers in cessation 
     intervention methods; efforts to encourage health plans and 
     insurers to provide coverage for evidence-based tobacco use 
     cessation treatment.
       5. Research Initiatives to Prevent Tobacco Addiction.
       Purpose: To promote tobacco-related research strategies.
       The Institute of Medicine will perform an independent study 
     to provide recommendations for tobacco-related research. 
     Tobacco-related research at CDC, NIH, and AHCPR will include 
     investigation of: surveillance and epidemiology of tobacco 
     use; prevention of tobacco use; the science of addiction; 
     cessation strategies.
       An interagency council will ensure that: the research 
     strategy is implemented, and that it is modified to take into 
     account new findings; new developments are disseminated to 
     states and communities.
       6. National Public Health Education Campaign.
       Purpose: To provide for a national public health promotion 
     and health education campaign designed to reduce the use of 
     tobacco products.
     III. Standards to Reduce Involuntary Exposure to Tobacco 
         Smoke
       The PAST Act will require OSHA to promulgate within 12 
     months a final rule relating to indoor air quality in 
     industrial and nonindustrial indoor and enclosed work 
     environments.

  Ms. COLLINS. Mr. President, I am pleased to join with my colleagues, 
Senators Jeffords and Enzi in introducing the Preventing Addiction to 
Smoking Among Teens Act.
  Tobacco is the No. 1 preventable cause of death in the United States, 
accounting for more than 400,000 deaths a year and more than $50 
billion in health care costs. Clearly the single most effective thing 
we can do to improve our Nation's health and control health care costs 
is to stop smoking.
  While recent headlines detailing the settlement of multimillion 
dollar lawsuits against the tobacco industry might delude us into 
thinking that we are winning the war against tobacco, the facts tell a 
far different story. Despite extensive public health campaigns linking 
smoking to heart disease and cancer, smoking rates are actually going 
up, particularly among our young people. Tragically, addiction is 
increasingly a ``teen-onset'' disease: in fact, Mr. President, 90 
percent of all smokers began smoking before age 21,
  What is particularly alarming is that children, especially girls, are 
smoking at younger and younger ages. Smoking is at a 19-year high among 
high school seniors and has increased over 35 percent among eighth 
graders and 43 percent among tenth graders over the last 7 years.
  Moreover, of the 3,000 teens who enter the ranks of ``regular 
smokers'' every day, one-third will die tobacco-related deaths. Mr. 
President, I am very proud of many of the accomplishments and 
achievements of my great State of Maine, but there is one area where we 
do need to do much, much better. The sad fact is that my State of Maine 
has the dubious distinction of having the highest smoking rate among 
people age 18 to 34 in the entire United States. In Maine, almost 40 
percent of high school students smoke. They purchase 1.4 million packs 
of cigarettes illegally each year. If this trend continues, more than 
31,000 young people in Maine currently under the age of 18 will die 
prematurely from tobacco-related diseases. If we are to put an end to 
this tragic yet preventable epidemic, we must accelerate our efforts 
not only to help more smokers to quit, but also to discourage young 
people from ever lighting up in the first place.
  The Preventing Addiction to Smoking Among Teens Act, which we are 
introducing today, adopts a comprehensive approach to prevent teens 
from smoking and builds upon and improves the public health components 
of the tobacco settlement announced last summer. It is not designed to 
deal with every question and every issue raised by the settlement. 
Rather, it focuses on what I believe should be the prime goal of any 
tobacco settlement, and that is to reduce teen smoking.
  Among its provisions, this legislation gives clear and comprehensive 
authority to the FDA to regulate tobacco products and their components. 
The tobacco industry will have to turn over all--all--of its documents 
to the FDA related to cigarette research and health, and the FDA will 
be able to require the companies to reduce or to eliminate harmful 
ingredients or to require safer technological improvements through 
informal rulemaking. Moreover, after 10 years, the FDA could can 
propose an outright ban on

[[Page S765]]

cigarettes or smokeless tobacco products. However, should such a 
prohibition be required or undertaken, it would require congressional 
approval. I think that is appropriate. I think that a decision of that 
magnitude should come back to Congress.
  In my judgment, these provisions represent a marked improvement over 
last summer's proposed tobacco settlement. The settlement has been 
criticized for requiring the Food and Drug Administration to go through 
an arduous formal rulemaking process. Moreoever, unlike the tobacco 
settlement, our bill does not require the FDA to prove the absence of a 
black market--which critics have rightly pointed out would be 
impossible--in order to regulate a product. Finally, to provide the 
resources necessary for their expanded regulatory powers, the bill 
requires the FDA to assess a ``user fee'' of $100 million annually on 
all manufacturers selling FDA-regulated tobacco products in the United 
States.
  The bill also incorporates very important recommendations on 
combating teenage smoking. It calls for strong warning labels. It calls 
for a ban on vending machine sales that make tobacco products so 
available to teenagers, it would ban outdoor advertising and the brand-
name sponsorship of sporting events, and it would prohibit the use of 
images like Joe Camel and the Marlboro Man.
  It also, Mr. President, holds the tobacco companies accountable by 
imposing stiff financial penalties if the smoking rate among children 
does not decline by 30 percent in 5 years, 50 percent in 7 years, and 
60 percent in 10 years. Moreover, under our bill, there is no cap on 
penalties, and the price goes up the more the companies miss the 
targets. These are very important, tough new improvements over the 
proposed settlement.
  Our bill incorporates strong measures to ensure that restrictions on 
youth access to tobacco products are tough and enforceable. It promotes 
the development of State and community action programs designed to 
educate the public on addiction and the hazards of tobacco use and to 
promote the prevention and the cessation of cigarette smoking.
  It calls for a national public education campaign to deglamorize the 
use of tobacco products and to discourage young kids from smoking. And 
finally, it calls for a comprehensive tobacco related research program 
to study the nature of addiction, the effects of nicotine on the body, 
and how to change behavior, particularly that of children and teens.
  Mr. President, I believe that the legislation we are introducing 
today can serve as a basis for broad, bipartisan support to deal with 
the public health issues that should serve as the foundation for any 
national health policy in this area.
  I look forward to working with Chairman Jeffords, Senator Enzi, and 
my other colleagues on the Labor Committee as Congress deals with this 
important issue.
  Mr. ENZI. Mr. President, I rise today as an original cosponsor of 
legislation offered by my esteemed colleague from Vermont, Senator 
Jeffords. I appreciate his steady commitment to improving our nation's 
public health--especially as it relates to the pending global tobacco 
settlement. I, too, believe that we have an opportunity to dramatically 
affect the number of current and future smokers through education, 
research and regulation of tobacco products. It is my belief that the 
Prevention Addiction to Smoking Among Teens, or PAST Act, is a 
significant component that accomplishes just that.
  The PAST Act is the first piece of legislation fashioned after the 
global tobacco settlement--reflecting the resolution's public health 
aspects. I commend the Senator and his staff for working with me on 
remedying a number of outstanding issues in this bill. I look forward 
to working closely with my colleague on tightening this legislation as 
it works its way through the mix.
  I do wish to share my thoughts on a number of issues in the global 
settlement that must not be overlooked. In addition, I would point out 
that a handful of these issues relating to public health are already 
addressed in the PAST Act. First, I believe the settlement fails to 
complement FDA's regulatory role by tapping the expertise of other 
federal agencies with relative jurisdiction. Second, the look-back 
provisions prescribed by the global settlement are only geared toward 
our nation's youth and don't apply to smokers above the age of 18. 
Third, the settlement focuses largely on reimbursing Medicaid 
expenditures and ignores enormous Medicare expenditures for smoking 
related illnesses. Finally, the settlement's overall compensation 
mechanism fails to address long-term smoking attributed illnesses. In 
light of these and other inherent difficulties, I am reluctant to 
embrace the entire global settlement with open arms. We are accepting 
revenues for past problems and insuring the future without 
compensation.
  Let me first share my concerns regarding the FDA's role. The global 
settlement would delegate all regulatory authority of tobacco products 
to the Food and Drug Administration (FDA), including advertising and 
education. Although I favor FDA being the key regulatory agency of 
tobacco products, I do not believe the agency needs an annual 
allocation of $300 million to carry out its obligations--that's nearly 
10 times what the FDA requested to enforce its original tobacco rule 
and one-third the agency's total annual budget. Such funding for one 
agency could not only foster regulatory abuses, but also stretch FDA's 
internal resources while simultaneously compounding Congress' oversight 
responsibilities. Such an approach is nothing more than a blueprint for 
yet another big government bureaucracy incapable of meeting its alleged 
purpose. I believe Senator Jeffords has acknowledged this predicament 
in the PAST Act. Rather than allotting $300 million each year for the 
FDA, the agency would receive $100 million, while other federal 
agencies with jurisdiction would receive $135 million, with the 
remaining $65 million going to the states for enforcement. This is a 
very fairminded approach and we largely avoid an unfunded federal 
mandate.
  Second, the look-back provisions included in the global settlement 
were written to be applicable to our nation's youth--ages 18 and under. 
As a result, Senator Jeffords' bill only addresses the admirable 
objective of reducing underage smoking. While I have no problem with 
setting strict goals for reducing underage tobacco use, I firmly 
believe that the global settlement and any subsequent legislation 
should not overlook the need to reduce the overall impact of smoking 
related illnesses. We must be careful not to lend pride of being an 
adult to smoking. I appreciate Senator Jeffords' commitment to 
strengthening this section of the PAST Act.
  Third, the global settlement fails to address Medicare smoking-
attributable expenditures by focusing all of its attention on 
reimbursing states for Medicaid expenditures. This is a substantial 
financial oversight in my opinion. In 1995, the Health Care Financing 
Administration spent $176.9 billion in Medicare payments. Medicare 
outlays for fiscal 1996 are estimated to be $193.9 billion. 
Conservatively assuming that only 5 percent of those expenditures were 
smoking related, the average Medicare expenditures attributable to 
smoking during 1995-1996 would still amount to $9.3 billion per year, 
thereby bringing the twenty-five year total to $192.3 billion. This is 
an astronomical sum that deserves consideration.
  Finally, the global settlement's reimbursement structure is dubious 
at best. It is my belief that Senator Jeffords' legislation must 
receive a sound, long-term financial commitment from the tobacco 
industry. Under the current settlement, tobacco companies would pay an 
initial $10 billion, and make annual payments starting at $8.5 billion 
in the first year and increases to $15 billion in the fifth year of the 
settlement. While the total estimated payments over 25 years would be 
$368.5 billion, there is no guarantee under the settlement's structure 
that the total amount would be collected. Economic conditions could 
change or tobacco companies could be driven out of business leaving the 
federal government holding an enormous tab for a very expensive 
regulatory scheme. Moreover, a large portion of the global settlement 
total may not even go to reimburse government for the costs of 
cigarette smoking. The money is designed to fund everything from 
underage smoking cessation campaigns to

[[Page S766]]

potentially large civil damage awards. The scope of expenditures under 
the global settlement is too broad and the reimbursement mechanism is 
too incomplete to warrant Congressional approval.
  In the coming weeks, I will continue to advocate an alternative 
reimbursement mechanism that not only caters to the PAST Act, but 
compensates for smoking attributed illnesses under the Medicare program 
as well. Two principles lie at the heart of this alternative approach. 
First, nonsmoking taxpayers should not be expected to continue footing 
the bill for what are largely self-induced illnesses. Second, Congress 
must ensure that the actual compensation fund is solvent for years to 
come. To these ends, I believe we should give serious thought to a new 
industry-based approach in which the government determines the costs 
caused by the manufacturer's product, and then requires the 
manufacturer and smoker to pay for these costs. Such a program would 
entirely eliminate smoking-attributed reimbursements from Medicaid and 
Medicare.
  A ``Smoker's Compensation Fund'' of this type could be modeled on the 
Worker's Compensation Funds already in existence in the states. The 
proceeds for this fund would come from the tobacco industry, and 
ultimately from smokers themselves in the form of higher cigarette 
prices. The tobacco industry's annual contributions to the fund could 
be tied to the number of occurrences of smoking illnesses--the greater 
the occurrences, the larger the contribution. Using Worker's 
Compensation as a model, a rolling multi-year average could form the 
basis of annual premiums to individuals suffering from smoking-
attributed illnesses. This would create an economic incentive for the 
tobacco companies to take actions to reduce tobacco-related illnesses, 
thereby driving down the number of smokers over the long-term--a true 
look-back policy.
  Moreover, an industry-based approach would not allow tobacco 
companies to walk away from long-term smoking attributed illnesses 
through a total $368.5 billion payment over a 25 year period. Instead, 
it would administratively make the tobacco companies and the smokers 
themselves responsible for paying for the medical care of individuals 
with smoking-related illnesses indefinitely. I believe that the 
Smoker's Compensation Fund concept would be the best vehicle to provide 
long-term financial coverage not only for the Medicaid and Medicare 
programs and smokers of all ages, but for the public health provisions 
outlined in Senator Jeffords' bill being introduced today.
  Thank you, Mr. President.
                                 ______
                                 
      By Mr. FORD:
  S. 1649. A bill to exempt disabled individuals from being required to 
enroll with a managed care entity under the medicaid program; to the 
Committee on Finance.


        medicaid managed care exemption for disabled individuals

  Mr. FORD. Mr. President, today I am introducing legislation to exempt 
certain disabled individuals from mandated managed care coverage under 
Medicaid. During consideration of last year's budget legislation, this 
issue arose but was not addressed in a satisfactory manner. That 
legislation provided a broad grant of authority to states to require 
individuals eligible for Medicaid to enroll in managed care plans. 
Prior to this change, states were required to obtain waivers from the 
federal government in order to initiate such cost savings measures 
which would shift large portions of their Medicaid populations into 
managed care.
  However, states have generally not been interested in shifting 
certain categories of individuals into managed care, such as 
individuals in nursing homes or special needs children. In fact, last 
year's legislation specifically exempted certain categories of special 
needs children under age nineteen.
  Mr. President, I believe for certain categories of individuals it 
does not make sense to limit this exemption to individuals under age 
nineteen. For example, mentally retarded individuals receiving Medicaid 
benefits do not enter into a new health care category once they reach 
their nineteenth birthday. I believe limiting the exemption for such 
individuals is arbitrary and unwise policy. My legislation would simply 
remove the age limitation for severely disabled individuals.
  I want to express my thanks to the Voice of the Retarded for their 
leadership on this issue and their willingness to bring it to my 
attention. I ask unanimous consent that a letter in support of this 
legislation from that organization be inserted into the Record. I also 
want to thank Louise Underwood, a constituent of mine who has been a 
tireless advocate over the years for the rights of mentally retarded 
and other disabled individuals. It is my hope that this straightforward 
correction to last year's legislation will be viewed as 
noncontroversial, and can be enacted into law in the months ahead.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                        Voice of the Retarded,

                                                 February 3, 1998.
     Hon. Wendell H. Ford,
     Senate Russell Office Building,
     Washington, DC.
       Dear Senator Ford: On behalf of all members of Voice of the 
     Retarded (VOR) nationwide, I wish to thank you for your long-
     standing attention to the many intense needs of society's 
     most-impaired people. More than any other public figure, you 
     have consistently championed the causes of those who cannot 
     speak for themselves. We, their family members and only 
     spokespersons, are eternally grateful to you.
       We come once again to seek your assistance in correcting 
     what seems to have been an unintentional oversight in the 
     language of the Balanced Budget Act of 1997.
       As you know, the ability of traditional managed care models 
     to meet the unique health care requirements of people with 
     disabilities is uncertain. Congress recognized this when it 
     exempted SSI-eligible special needs children from mandatory 
     managed care provisions of the Balanced Budget Act of 1997. 
     This exemption reconciled the states' interest in maintaining 
     cost control and flexibility in program management with the 
     disability community's concern that managed care would 
     negatively impact access to appropriate specialized health 
     care.
       It is our belief that age is an arbitrary, artificial 
     barrier to the provision of health care services. Mental 
     retardation is a life-long impairment that does not disappear 
     at age 19. We, therefore, respectfully request that you 
     support corrective legislation to ensure that adults with 
     mental retardation can receive the specialized health care 
     that they need throughout their lives unimpaired by managed 
     care.
       Thank you for your consideration.
           Sincerely,
                                                      Polly Spare,
                                                        President.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Domenici):
  S. 1662. A bill to authorize the Navajo Indian irrigation project to 
use power allocated to it from the Colorado River storage project for 
on-farm uses; to the Committee on Indian Affairs.


              navajo indian irrigation project legislation

  Mr. BINGAMAN. Mr. President, I rise today to introduce legislation 
that will mean a great deal to the future economic development of the 
Navajo Nation and to the people in the Four Corners Region of New 
Mexico, Arizona, Utah, and Colorado.

  Mr. President, we are truly fortunate today to have one of the lowest 
national unemployment rates in recent memory. Unfortunately, the 
administration's economic juggernaut has not been felt everywhere. 
While national unemployment rates are below five percent, in my state 
of New Mexico, unemployment remains stuck at 8%. According to the 
Bureau of Labor Statistics, New Mexico has the second highest 
unemployment rate in the country, right behind the District of 
Columbia.
  Regrettably, one of the nation's highest unemployment rates is on the 
Navajo Indian Reservation, where unemployment is a staggering 50%. The 
unemployment rate in neighboring San Juan County is 12%, which is more 
than twice the national average. These statistics should be deeply 
troubling to all senators. Clearly, there is no region in this country 
in greater need of targeted economic development. Creating jobs is 
precisely the purpose of the legislation I am introducing today.
  In a nutshell, this bill allows the Navajo Nation's Indian Irrigation 
Project to use a portion of its existing allocation of federal electric 
power to help spur economic development and to create good jobs in the 
region.
  Mr. President, in 1962 Congress authorized the construction and 
operation of the Navajo Indian Irrigation Project. The project has 
blossomed into a 60,000 acre agricultural enterprise growing potatoes, 
beans, alfalfa,

[[Page S767]]

wheat, corn and livestock with annual revenues of $36 million. Today, 
the ``Navajo Pride'' brand name is a hallmark of agricultural quality 
nationwide. The Tribe's own Navajo Agricultural Products Industry 
(NAPI) operates this successful all-Indian project. NAPI has a full-
time staff of 300. The workforce swells to 1,200 during the summer 
growing season.
  In the 1962 legislation, Congress authorized the Bureau of 
Reclamation to reserve eighty-seven megawatts of electric power for use 
by the project. It is clear from the original authorization that the 
primary purpose of the project was to deliver water for the development 
of farming and allied industries. The reserved electric power is 
currently used to pump water to the project and to provide the water 
pressure needed for irrigation. The original plans called for the use 
of gravity-fed irrigation; however, the irrigation method was later 
changed to a more efficient electric-powered center-pivot system. 
Unfortunately, Congress had not foreseen these improvements and did not 
specifically authorize the use of federal power to run irrigation 
sprinklers. In a letter to me dated November 5, 1997, Commissioner 
Martinez of the Bureau of Reclamation stated that Congress had not 
provided the bureau with sufficient authority to allow NAPI to use its 
existing allocation of electric power for anything other than water 
pumping. Congress simply failed to authorize the use of federal power 
to run the sprinklers or for processing of the products grown there.
  The legislation I am introducing would allow NAPI to use its existing 
power allocation to run the project's irrigation sprinklers or 
factories on the reservation that process the agricultural products. 
This legislation does not increase the amount of power allocated to 
NAPI--nobody's allocation of electric power is reduced or affected in 
any way. Moreover, the change would have no cost or other impact on 
taxpayers.
  This legislation is a simple technical change. It clarifies existing 
congressional language. Moreover, because this is an all-Indian project 
established by Congress to benefit the Navajo Nation, this legislation 
does not create a precedent that would apply to any other irrigation 
project.
  This bill has the support of the Bureau of Reclamation. In addition, 
the Republican Governor of the state of New Mexico and the nearby 
cities, counties, and electric utility companies support this change 
because they recognize the economic benefits for the entire Four 
Corners Region. I would particularly like to acknowledge the City of 
Farmington and Republican Mayor Thomas C. Taylor for support of the 
project as reflected in a Memorandum of Understanding between the City 
and NAPI. In addition, the State of New Mexico has supported this 
effort with a grant to study water issues and by permitting the Navajo 
Nation to use state bonding capacity.
  Mr. President, Congress must not delay action to help reduce the 
unacceptable unemployment rates on the Navajo Reservation. This bill is 
an important step toward creating hundreds of year-round jobs and 
spurring economic development in San Juan County and the rest of the 
Four Corners Region. I urge the Chairman of the Energy and Natural 
Resources Committee to schedule a hearing on this worthy legislation at 
the earliest possible date.
  I ask unanimous consent to have a copy of the bill included in the 
Record along with a copy of the Memorandum of Understanding between the 
City of Farmington and the Navajo Agricultural Products Industry. I 
also ask unanimous consent to include in the Record letters supporting 
this legislation from the Bureau of Reclamation; Governor Johnson, the 
Cities of Farmington and Bloomfield, New Mexico; San Juan County, New 
Mexico; and the Navajo Tribal Utility Authority.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:

                                S. 1662

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

     SECTION 1. FINDINGS.

       Congress finds that--
       (1) the Navajo Indian irrigation project (in this section 
     referred to as the ``irrigation project'') was authorized for 
     construction and operation as a participating project of the 
     Colorado River storage project by the Act of June 13, 1962, 
     Public Law 87-483, pursuant to plans approved by the 
     Secretary of the Interior on October 16, 1957;
       (2) the irrigation project is an all-Indian irrigation 
     project authorized for the primary purpose of delivering 
     water to develop farming and allied industries that benefit 
     the Navajo Nation;
       (3) the Bureau of Reclamation has reserved 87 megawatts of 
     power and associated energy from the Colorado River storage 
     project for current and future use on the irrigation project, 
     but currently not more than 25 megawatts of power is being 
     used because the project is only partially completed; while 
     the initial and subsequent plans and authorizing legislation 
     for the irrigation project allow power to be used to deliver 
     water to the irrigation project by canals and to lift water 
     to heights sufficient to pressurize the sprinkler delivery 
     system, clarification is necessary to approve the use of 
     power for on-farm uses such as for powering center-pivot 
     irrigation systems or for related agricultural industry 
     purposes; and
       (4) the irrigation project is of vital economic importance 
     to the Navajo Nation, and substantial economic development 
     for the Four Corners Region and the Navajo Nation could be 
     realized if a portion of the 87 megawatt power allocation 
     were made available by the Bureau of Reclamation for powering 
     center-pivot irrigation systems and for related agricultural 
     industry purposes.

     SEC. 2. USE OF POWER.

       The first section of the Act of June 13, 1962 (Public Law 
     87-483; 76 Stat. 96) is amended by adding at the end the 
     following: ``The Navajo Indian irrigation project may use its 
     allocation of 87 megawatts of power from the Colorado River 
     storage project for water delivery, on-farm production, and 
     related agricultural industry purposes.''.
                                  ____


     Navajo Agricultural Products Industry and City of Farmington--
                      Memorandum of Understanding

       This Memorandum of Understanding (Agreement), between the 
     Navajo Agricultural Products Industry (NAPI) and the City of 
     Farmington (City), New Mexico, sometimes referred to as the 
     Parties, sets forth the terms and conditions to clarify 
     conflicting interests in delivery of electrical service to 
     the Navajo Agricultural Products Industry.
       Whereas, NAPI seeks the support of the City for the use of 
     Other Priority Use Power for the development of the proposed 
     french fry factory which will require a legislated Change in 
     Purpose; and
       Whereas, the City of Farmington recognizes and agrees with 
     NAPI that the development of the french fry factory will have 
     positive economic impact for the Navajo Nation, the City and 
     San Juan County; that the french fry factory will create over 
     600 jobs; and, that it will require the development of three 
     additional agricultural blocks which will have an important 
     and positive long range influence on the economic development 
     of the region; and
       Whereas, NAPI's General Manager Lorenzo Bates and the 
     City's Mayor Thomas C. Taylor met on November 21, 1997, to 
     resolve outstanding issues which have arisen regarding NAPI's 
     legislative request for a Change in Purpose of NAPI's 
     Colorado River Storage Project (CRSP) Project Use Power 
     allocation.
       Therefore, as a result of the meeting the Parties agree as 
     follows:
       1. NAPI agrees to continue to utilize electric power 
     provided by the City for its center pivots located in the 
     City's service area;
       2. The use and amount of such service to the center pivots 
     shall remain similar to the amount used by NAPI at the 
     signing of this Agreement and shall continue until the City 
     implements customer choice in its service area;
       3. This Agreement will be applicable and bind any person, 
     corporation, or entity which may purchase or acquire through 
     any means the Farmington Electric Utility System (FEUS).
       In consideration of NAPI's promises and covenants, the City 
     agrees as follows:
       1. To support NAPI's request for a legislative Change in 
     Purpose of a remaining portion of their eighty-seven 
     megawatts (87 mW) of CRSP allocation of federal power to be 
     used to supply electricity to the proposed french fry plant;
       2. To provide additional support through letters, 
     communications and action which will facilitate the 
     development of the french fry factory and is not 
     contradictory to policy decisions the City has made; and
       3. To review the FEUS rates for electric service within the 
     next two years and make an effort to offer competitive rates 
     for center pivot operations.
       By this acknowledgment, the Parties agree to abide by the 
     terms of this Agreement.
     Navajo Agricultural Products Industry.
     City of Farmington.
                                  U.S. Department of the Interior,


                                        Bureau of Reclamation,

                                 Washington, DC, November 5, 1997.
     Hon. Jeff Bingaman,
     U.S. Senate, Washington, DC.
       Dear Senator Bingaman: Thank you for your May 8, 1997, 
     letter co-signed by the New Mexico and Arizona Congressional 
     delegation, regarding the use of Federal power for the Navajo 
     Agricultural Products Industry's (NAPI) center pivot 
     irrigation system and industrial uses. The Bureau of 
     Reclamation (Reclamation) has no express authority to

[[Page S768]]

     allow the use of project power for these proposed on-farm 
     uses. Although Reclamation might have implicit authority 
     which would allow for the use of project power in the manner 
     requested, such an interpretation would not be consistent 
     with the past instances of Reclamation practice. While we 
     will continue to review the matter, given the lack of express 
     authority, legislation to resolve the matter conclusively and 
     expeditiously may be appropriate.
       The sale of Federal power from a Reclamation project is 
     governed by general Federal Reclamation law and authorizing 
     acts for specific projects. Reclamation may provide power 
     only for the uses authorized by Congress. Power is sold 
     either as project power at the project,\1\ or for other uses, 
     on or off the project (non-project power). The Navajo Indian 
     Irrigation Project (NIIP) was authorized for construction and 
     operation as a participating project of CRSP by Public Law 
     87-483 passed on June 13, 1962, pursuant to plans approved by 
     the Secretary of the Interior on October 16, 1957. Although 
     NIIP is an Indian irrigation project, it is subject to 
     Federal Reclamation law as provided by Section 4 of the 
     Colorado River Storage Project Act of April 11, 1956. The 
     planning and authorization documents, along with subsequent 
     planning reports, indicate that project power was intended to 
     accommodate delivery of water to the farm by canals and by 
     lifting water to heights sufficient to pressurize the 
     sprinkler irrigation delivery system. No specific indication 
     is made that project power would be available to run center 
     pivot irrigation systems or for on-farm municipal and 
     industrial uses, however, it is clear that the primary 
     purpose of the project is to deliver water for the 
     development of farming and allied industries.
---------------------------------------------------------------------------
     \1\ There are two types of project power, ``project use 
     power'' and ``priority use power.''
---------------------------------------------------------------------------
       Reclamation has reserved 87 Megawatts (MW) of project power 
     from the CRSP for current and future use on the NIIP for 
     authorized purposes. Although as you point out in your May 8, 
     1997, letter, the terms of the 1990 interagency agreement and 
     revisions agreed to by the Western Area Power Administration, 
     Reclamation, and NAPI provide that NAPI can use other 
     Priority Use Power for sprinkler irrigation and industrial 
     uses, specific Congressional authority for such uses does not 
     exist and therefore legislation making such authority clear 
     would be appropriate. As development of NIIP continues, there 
     are increasing opportunities for application of various 
     conservation measures with attendant energy saving. With 
     specific Congressional authorization, we believe that overall 
     power usage, including the proposed on-farm uses can be 
     accommodated within the present 87 MW allocation.
       If you desire to discuss these matters further, please 
     contact Arlo Allen at (801) 524-3612.
           Sincerely,
                                                Eluid L. Martinez,
     Commissioner.
                                  ____

                                           Office of the Governor,


                                                State Capitol,

                                  Santa Fe, NM, February 11, 1998.
     Hon. Jeff Bingaman,
     U.S. Senate, Hart Senate Office Bldg., Washington, DC.

     Hon. Pete V Domenici,
     U.S. Senate, Hart Senate Office Bldg., Washington, DC.
       Dear Senator Bingaman and Senator Domenici: It is with 
     pleasure that I give my support to the Navajo Agricultural 
     Products Industry French Fry Plant. This project offers great 
     opportunities for self-sufficiency and economic development 
     for the Navajo Nation, City of Farmington, San Juan County 
     and the State of New Mexico, as well as the Navajo 
     Agricultural Product Industry. The creation of up to 500 
     plant jobs and another 100 farming jobs will benefit the 
     community and the state. We commend everyone involved for the 
     collaboration between state, federal, local and tribal 
     agencies to make the french fry project a reality.
       The Department of Economic Development has been heavily 
     involved in this project for several years and spearheaded 
     the effort to pass a new law to allow Nations, Tribes and 
     Pueblos access to the New Mexico Finance Authority bonding 
     capacity. I supported and signed into law this piece of 
     legislation. The New Mexico Department of Environment also 
     gave a grant to the Navajo Nation of $200,000 to study water 
     issues for the french fry factory. The funding for the study 
     came through the State Legislature with my full support In 
     1997, the New Mexico Legislature and my administration worked 
     to pass legislation to further assist the Navajo Nation 
     recruit the french fry factory to NAPI.
           Sincerely,
                                                  Gary E. Johnson,
     Governor.
                                  ____

                                               City of Farmington,


                                          Office of the Mayor,

                                Farmington, NM, February 10, 1998.
     Mr. LoRenzo Bates,
     General Manager, Navajo Agricultural Products Industry, 
         Farmington, NM.
       Dear Mr. Bates: Based upon information received from the 
     Navajo Agricultural Products Industry (NAPI), the Navajo 
     Tribal Utility Authority (NTUA) and Senator Bingaman's 
     office, the City of Farmington (City) understands that the 
     location of the proposed french fry plant will straddle the 
     area served by NTUA and the City of Farmington's electric 
     utility. Furthermore, our understanding is that the 
     electricity required for the french fry plant will be 
     provided from resources available to NAPI under the 
     Interagency Agreement among NAPI and the US Department of 
     Interior--Bureau of Indian Affairs and the US Department of 
     Interior--Bureau of Reclamation and the US Department of 
     Energy--Western Area Power Administration, Colorado River 
     Storage Project and that NTUA proposes to build the 
     transmission/distribution system necessary to deliver such 
     resources to NAPI.
       In order for NAPI to have access to the resources under the 
     Agreement referred to above, it is necessary to have 
     legislation introduced which will provide for a change in 
     purpose for the use of the project power. Senator Bingaman's 
     office is intending to introduce that legislation in the 
     Senate during the latter part of February, 1998. The City of 
     Farmington, in accordance with the Memorandum of 
     Understanding between NAPI and the City dated December 10, 
     1997, supports NAPI's request for a legislative Change in 
     Purpose of a remaining portion of the eighty-seven megawatts 
     (87mW) of CRSP allocation of federal power to be used to 
     supply electricity to the proposed french fry plant.
           Sincerely,
                                                 Thomas C. Taylor,
                                                            Mayor.
                                               City of Farmington,


                                          Office of the Mayor,

                                  Farmington, NM, January 8, 1998.
     LoRenzo Bates,
     General Manager, NAPI, Farmington, NM.
       Dear LoRenzo: The City of Farmington supports and 
     encourages the development of the potato processing facility 
     at NAPI. This project has the potential of creating numerous 
     job opportunities for a large, unemployed segment of the 
     population. In the City's application to the Empowerment 
     Zone/Enterprise Community program we attempted to focus on 
     job creation in areas south of our city where residents live 
     far below the poverty standards. This project is the best 
     opportunity for Navajo employment in that area.
           Sincerely,
                                                 Thomas C. Taylor,
     Mayor.
                                  ____



                                           City of Bloomfield,

                                 Bloomfield, NM, February 6, 1998.
     Senator Jeff Bingaman,
     Hart Office Building, Washington, DC.

     RE: Navajo Agricultural Products Industry (NAPI)--Potato 
     Processing Plant

       Dear Senator Bingaman: The City of Bloomfield has been 
     supportive of NAPI since its inception and in particularly 
     supportive of its efforts to develop a ``potato processing 
     plant''. We understand that Legislation is being prepared to 
     allow NAPI to utilize WAPA Power for the plant and other 
     purposes. We therefore, request your support of this 
     Legislation.
       As you are well aware, the Navajo Nation has a 49% 
     unemployment rate on the reservation, therefore we feel that 
     the development of the potato processing plant is of utmost 
     importance to the Navajo Nation, San Juan County and the City 
     of Bloomfield.
       On behalf of myself and the City Council I would like to 
     reaffirm the City's support for what can only be an economic 
     benefit to all the citizens in Northwest New Mexico.
           Sincerely,
                                                       Sam Mohler,
     Mayor.
                                  ____



                                              San Juan County,

                                      Aztec, NM, February 6, 1998.
     Hon. Jeff Bingaman,
     Hart Senate Office Building, Washington, DC.

     Re: Navajo Agriculture Products Industry (NAPI)--Potato 
     Processing Plant

       Dear Senator Bingaman: San Juan County has been supportive 
     of the NAPI's ``Potato Processing Plant'' since its 
     inception. On numerous occasions we have met with Mr. Lorenzo 
     Bates of NAPI and our legislative delegation to attempt to 
     bring this project to fruition.
       The Navajo Nation has a 49% unemployment rate on the 
     Reservation and because of this, we feel that the Potato 
     Processing Plant is of upmost importance to the County.
       On behalf of myself and the San Juan County Commission, I 
     would like to reaffirm the County's support for what I feel 
     will be an economic benefit to all the citizens in San Juan 
     County.
       Please let us know if we can be of further assistance.
           Sincerely,
                                                    Tony Atkinson,
     County Manager.
                                  ____



                              Navajo Tribal Utility Authority,

                             Fort Defiance, AZ, February 10, 1998.
     Hon. Jeff Bingaman,
     U.S. Senate, Hart Senate Office Building, Washington, DC.

     Re: Navajo Indian Irrigation Project On Farm Use of Colorado 
     River Storage Project Power
       Dear Senator Bingaman: The Navajo Tribal Utility Authority, 
     the public agency and enterprise of the Navajo Nation which 
     provides power and energy to consumers within the Navajo 
     Indian Reservation, has been advised of the possibility of 
     legislation which would authorize the use of an existing 
     allocation of 87 megawatts of Colorado River Storage Project 
     Power for certain on farm uses, including center pivot 
     sprinkler irrigation and for processing agricultural products 
     for consumer use.

[[Page S769]]

       The Utility Authority supports the proposed legislation 
     which clarifies the availability of this power for on farm 
     uses. The Navajo Indian Irrigation Project has for many years 
     been delayed in its completion and the allocation of power, 
     originally made on the basis of a flood irrigation 
     arrangement, may not be totally used for many, many years.
       Since the promised benefits for agreement to share water 
     shortages have not materialized as expected, it seems 
     appropriate to suggest that, in some small measure, passage 
     of this legislation would attempt to address the many delays 
     which have consistently plagued the Navajo Indian Irrigation 
     Project.
       The Authority recognizes that the initial allocations of 
     ``project use'' power to the Irrigation Project did not 
     specifically mention sprinkler irrigation by center pivot 
     methods nor the development of municipal or industrial uses 
     on the farm. However, these activities must have been 
     contemplated within the plan for the development of a 110,000 
     acre irrigation farm for the Navajo Nation.
       As the current serving utility for a substantial portion of 
     the Irrigation Project, the Authority supports enactment of 
     the legislation by the Congress.
           Very truly yours,
                                                Malcolm P. Dalton,
     General Manager.

                          ____________________