[Congressional Record Volume 144, Number 20 (Wednesday, March 4, 1998)]
[Senate]
[Pages S1336-S1352]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Ms. MOSELEY-BRAUN (for herself, Mr. Moynihan, Mrs. Murray, Mr.
Kennedy, Mr. Graham, Mr. Daschle, Mr. Reid, Mr. Glenn, Mr.
Lautenberg, Mr. Levin, Mr. Kerry, and Mr. Reed):
S. 1705. A bill to amend the Internal Revenue Code of 1986 to expand
the incentives for the construction and renovation of public schools;
to the Committee on Finance.
THE PUBLIC SCHOOL MODERNIZATION ACT OF 1998
Ms. MOSELEY-BRAUN. Mr. President, I send to the desk a bill and ask
for its appropriate referral.
The PRESIDING OFFICER. The bill will be received and appropriately
referred.
Ms. MOSELEY-BRAUN. Mr. President, today I am pleased to introduce,
along with a number of my colleagues, the Public School Modernization
Act of 1998. This legislation addresses one of the most fundamental
problems with public education in America, and that is that many of our
elementary and secondary schools are literally falling down around our
children.
The Public School Modernization Act of 1998 will help States and
school districts finance their school improvement priorities. It will
help them modernize classrooms so that no child misses out on the
information age. It will help them ease overcrowding so that no child
is forced to learn the principles of geometry in a gymnasium. It will
help them patch leaky roofs, fix broken plumbing, and strengthen the
facilities that provide the foundation for our children's education.
Without this support, schools will continue to crumble under the weight
of deferred maintenance and neglect, and our children's education, and
their future, and our Nation's future, will suffer as a result.
Education in America correlates with opportunity for individuals, but
also for our country as a whole. The rungs of the ladder of opportunity
in America are crafted in the classroom. Consider that high school
graduates earn 46 percent more each year than those who don't graduate
from high school. College graduates earn 155 percent more every year
than those who do not graduate from high school. Over the course of a
lifetime, the most educated Americans will earn five times as much as
the least educated Americans. So education is clearly related to
individual prosperity and the ability of people to function in this new
economy.
Education also correlates to almost all indicia of economic and
social well-being. Educational attainment can directly be tied to
income, to health, to the likelihood of being on welfare, to the
likelihood of being incarcerated in a prison, and to the likelihood of
voting and participating in our democracy.
However, education is more than a tool simply to lift people out of
poverty or to provide a better standard of living for individuals. It
is also the engine that will drive America's economy in the 21st
century. In a Wall Street Journal survey last year of leading U.S.
economists, 43 percent of them said that the single most important
thing that we could do to increase our long-term economic growth would
be to invest more in education and research and development. Nothing
else came close to education in that survey. One economist said, ``One
of the few things that economists will agree upon is the fact that
economic growth is very strongly dependent on our own abilities.''
A recent study by the Manufacturing Institute concluded that
increasing the education level of workers by 1 year raises the
productivity level by 8.5 percent in manufacturing. Imagine, Mr.
President, if you will, that in this global economy, the only way we
will be able to hold on to our position as the country in the world
with the highest standard of living is if we prepare our work force--as
a whole, all of our workers--to compete at the highest level of
competition and to produce at the highest level of productivity.
[[Page S1337]]
The Public School Modernization Act of 1998 represents the kind of
investment that will result in better futures for our children and a
better future for our country. The bill strengthens the fundamental
tenet of American education--local control. By helping schools finance
their capital improvement priorities, the Federal Government can free
local resources for educational activities and can help give
communities the kind of buildings that they need before they can
implement the kinds of school reforms that parents and educators are
demanding.
The Public School Modernization Act of 1998 creates a
simple, effective, and easy-to-administer means of helping communities
modernize their schools. The bill creates a new category of zero coupon
bonds for States and school districts to issue to finance capital
improvements. It allocates $21.8 billion worth of bonding authority to
States and large school districts over the next 2 years.
Over 5 years, the bill will cost our National Government only $3.3
billion, but $21.8 billion worth of new construction and modernization
will be made available by that $3.3 billion, which means for every
Federal dollar that we invest over the next 5-year period, there will
be an additional 6.6 in State and local dollars. That is a pretty good
leverage capacity from this kind of investment.
Perhaps most important, though, Mr. President, is that this bill is
bureaucracy-free, or as close to bureaucracy-free as we can manage.
States and school districts need only to comply with two main
requirements before issuing these new school modernization bonds.
First, they must conduct a survey of their school facility needs, which
you would think that every school district would have already, but the
truth is they don't, yet. Second, they must describe how they intend to
allocate the bonding authority to assure that schools with the greatest
needs and the least resources benefit. That is it. Those are the only
strings. There is no reapplying for funds, no continuous oversight, no
getting individual projects approved by some Federal agency. The plan
is simple. It will work. And it will strengthen local schools.
Mr. President, the magnitude of the school facilities problem is so
great today that many districts cannot maintain the kind of educational
environment necessary to teach all of our children the kinds of skills
they will need to compete in the 21st century, global economy.
We commissioned a study by the GAO a couple years ago. What they
concluded was that every day some 14 million children in this country--
14 million children--attend schools in need of major renovations or
outright replacement, 7 million children every day attend schools with
life-threatening safety code violations, and it will cost $112 billion
to bring the schools up to code. This is not bells and whistles, this
is not equipping them with computers and fancy new cosmetics, but just
to address the toll that decades of deferred maintenance have taken on
our school facilities across this country.
In my State of Illinois, school modernization and construction needs
top $13 billion. Many of our school districts have a difficult time
enough just buying textbooks, pencils, and teacher salaries, let alone
financing capital improvements. This would free local resources for
education by providing Federal support for bricks and mortar.
By the way, the national school repair price tag, as enormous as it
sounds, does not include the cost of wiring our schools for modern
technology. One of the greatest barriers to the incorporation of modern
computers into classrooms is the physical condition of many school
buildings. You can't very well use a computer if you don't have an
electrical system working in the wall to plug it into. According to the
GAO study, almost half of all schools--half of all schools--lack enough
electrical power for the full-scale use of computers, 60 percent lack
the conduits to connect classroom computers to a network, and more than
60 percent of the schools lack enough phone lines for instructional
use.
Last year, principal Rita Melius from Waukegan, IL, came to
Washington and told of her experience with computer technology at her
school. She thought she was doing the right thing by equipping her
schools with modern school technology, but when she deployed the
computers around the schools, fires started in the building because the
wiring was so old. Her experience is being replicated all over this
country as communities try to bring their schools into the information
age. This legislation will give Ms. Melius, and others like her, the
resources to modernize their classrooms.
Mr. President, it will also give communities the power to relieve
overcrowding. According to the U.S. Department of Education, just to
keep up with growing enrollment, we will need to build some 6,000 new
schools over the next 10 years.
I have visited schools in Illinois where study halls are being held
in the hallways, literally, because there is no other space. I have
seen stairway landings converted into computer labs. I have seen
cardboard partitions used to turn one classroom into two. I point out,
Mr. President, that particular school was in what could be called a
basement. It wasn't exactly a basement, it was at ground level, but
they had cardboard separating two classes from each other. There is a
school, frankly, where the lunchroom has been converted into two
classrooms, where students eat in the gymnasium. And instead of having
gym, they have ``adaptive physical education'' while they stand next to
their desks, because the gyms are being used for lunchrooms. It is
really shameful, Mr. President, and it is the situation that we find in
almost a third of the schools in this country.
Again, I point out that this phenomenon is not just an inner-city
problem. It exists in rural communities and suburban communities as
well--just about one-third in each type of community across the United
States.
Teachers and parents know full well that these conditions directly
affect the ability of their children to learn, and research backs up
that intuition. Two separate studies found a 10 to 11 percent
achievement gap between those students in good buildings and those in
shabby or poor buildings, after controlling for all other factors.
Other studies have found that when buildings are in poor condition,
students are more likely to misbehave. Three leading researchers
recently concluded, ``. . .there's no doubt that building condition
affects academic performance.''
This morning, in a press conference in which a student from a local
school talked about overcrowded conditions, he mentioned that they were
having discipline problems from fights breaking out from what he called
``hall rage,'' because the overcrowding situation in the school was so
perverse and extreme that students were literally bumping into each
other trying to move from class to class. So we have a situation here
in which academic performance is affected.
I think it is time to mention something at this point. We just saw,
this week, the grades come in on an international math and science
test. The results were profoundly disturbing. American students scored
close to the bottom, or at the bottom, on every math and physics test
offered.
Now, here we are. A new study of high school seniors in 23 countries
shows U.S. students scored significantly lower than students in other
countries. This is in math, nations with scores above the international
level: Netherlands, Sweden, Denmark, Switzerland, Iceland, and Norway.
Nations with scores close to the international average: Italy, Russia,
Lithuania, Czech Republic, and the United States. Nations lower than
the international level: Cyprus and South Africa. We are in the
category of nations with scores lower than the international level,
which includes: France, Russia, Switzerland, Denmark, Cyprus,
Lithuania, Australia, Greece, Sweden, Canada, Slovenia, Italy, Czech
Republic, Germany, and the United States is next to last in advanced
mathematics. In physics: Norway, Sweden, Russia, Denmark, Slovenia,
Germany, Australia, Cyprus, Latvia, Greece, Switzerland, Canada,
France, Czech Republic, Austria, and the United States. We are last.
From the President down to the local township officials, this should be
a clarion call that we have to work to improve the quality of our
schools.
[[Page S1338]]
Our school facilities problems directly result, Mr. President, from
our archaic school funding formula and system. The current system, the
way we fund schools, was established a century ago when the Nation's
wealth was measured in terms of property wealth, in terms of
landholdings. Wealth is no longer accumulated just in land, and the
funding mechanism that ties funding of our education to the local
property tax is no longer appropriate, nor is it adequate.
Again, according to the GAO, poor and middle-class school districts
try the hardest to raise revenue from the property tax, but the system
works against them. In some 35 States, poor districts--that is,
districts with smaller property tax bases--have higher tax rates than
wealthy districts, but they raise less revenue because there is less
property wealth to tax.
This local funding model, this model of depending on the local
property tax to fund education, does not work for school
infrastructure, just as it would not work for our highways or any other
infrastructure.
It is ironic that we are here talking about the highway bill. Imagine
what would happen if we based our system of roads on the same funding
model we use for education. Imagine if every community was responsible
for the construction and maintenance of the roads within its borders.
In all likelihood, we would see smooth, good roads in the wealthy
towns, a patchwork of mediocre roads in middle-income towns, and very
few roads at all in poor communities. Transportation would be hostage
to the vagaries of wealth and geography. Commerce and travel would be
difficult, and navigation of such a system would not serve the best
interests of our whole country. That hypothetical, unfortunately,
precisely describes the way that we fund our public education system.
I believe we need a new approach. We need a partnership among all
levels of government and the private sector that preserves local
control in education but creates a financing balance that better serves
local property taxpayers, children, schools, and indeed our entire
country. This new act I am introducing today represents such a new
partnership. It is a simple and effective means of leveraging limited
Federal resources, strengthening local control of education, and
improving the educational opportunity for every child.
I urge my colleagues to take a close look at the needs of the schools
in their own States and decide what they stand for: higher property
taxes and crumbling schools, or lower property taxes and a new
partnership to improve our schools for the 21st century. I believe that
we have some opportunities here.
Again, I have visited a lot of schools and I have seen what happens
when we engage the resources sufficient to provide an environment and
support needed for our children to learn. American kids are no dumber
than kids anywhere else in the world. There is no reason for us to be
at the bottom of this international testing. It is not their fault. It
is our fault for failing to engage appropriately, to give public
education the kind of support that it needs to have.
Now, there is some good news I would like to call to your attention.
A group of some 20 Illinois school districts, led by Superintendent
Paul Kimmelman, banded together to form a group called the First in the
World Consortium. Their goal was to score first in the world on the
international math and science test. At the same time that these
results came out, Mr. President, the results from the First in the
World Consortium came out also. They succeeded. The students in that
consortium placed first in the world when compared with other
countries, which is far above the dismal performance of our country as
a whole.
What does this consortium have that the schools in our country lack?
It is not the makeup of students. The kids are as capable anywhere in
the country, whether they come from rich families or poor families. We
have some of the brightest students in the world, who need only the
opportunity to learn. The difference, however, is what supports we, as
a community, a national community, can provide for them--schools with
first-rate facilities, small classes, modern technology, and supportive
communities.
So I hope that we will all take a look at the importance of this
legislation. This is a way that we can engage the support of the
National Government, our national community, acting in our national
interest to serve our most important resource, which is our children.
If we don't invest in them and if we don't build up these schools, many
of which were built--I am making an assumption about age, but when you
and I were in grammar school, Mr. President, these schools were built
almost a generation ago and, in many instances, more than a generation
ago. That generation saw fit to provide facilities that were suitable
for learning. That we have not, I believe, speaks volumes for us.
I think our generation has an absolute obligation and duty to provide
for this generation, the next generation of Americans, no less an
opportunity than we inherited from the last generation of Americans. We
have a duty to see to it that they have the ability to get educated and
to take their talent as far as those talents will take them, to
maximize the ability of every person to rise to the absolute best level
that he or she can, based on his or her natural talents.
Those natural talents, though, Mr. President, have to be nurtured in
an environment and in facilities that are suitable for learning. This
legislation will begin, hopefully, to create the kind of partnership
that will allow the National, State, and local governments to stop the
finger-pointing, stop the blame game, stop pushing the buck, and say it
is somebody else's duty, or responsibility, or fault, and allow us to
come together on behalf of what is clearly in our interest as citizens
not only of cities and States and local communities, but as citizens of
this great country.
This is why we have to come together. This is why we have to put the
old, tired arguments behind us. This is why I think we should take a
variety of ideas and put them out so that we can reach a consensus on
getting some results, getting results that will serve our children's
interests.
The public certainly wants us to do it. According to a bipartisan
poll released earlier this year, some 76 percent of registered voters
would support a $30 billion, 10-year Federal commitment to rebuild and
modernize our schools. This legislation provides for that kind of a
partnership. I certainly hope, Mr. President, that the Members of this
body will review the GAO reports regarding their own States, because
this is not just an Illinois problem, this is not just a North Carolina
problem, or a Wyoming problem; this is a problem for America, and every
State in this country has the same problem in the same ways. I urge
them to examine the reports by the General Accounting Office regarding
the condition of schools in their States, I ask them to examine the
report of the General Accounting Office regarding the property tax
dependence in their States, and I urge them to sign on and cosponsor
this legislation.
Mr. President, I ask unanimous consent that the bill and a summary of
the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1705
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 ``Public School Modernization
Act of 1998''.
SEC. 2. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.
(a) In General.--Part IV of subchapter U of chapter 1 of
the Internal Revenue Code of 1986 (relating to incentives for
education zones) is amended to read as follows:
``PART IV--INCENTIVES FOR QUALIFIED PUBLIC SCHOOL MODERNIZATION BONDS
``Sec. 1397E. Credit to holders of qualified public school
modernization bonds.
``Sec. 1397F. Qualified zone academy bonds.
``Sec. 1397G. Qualified school construction bonds.
``SEC. 1397E. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL
MODERNIZATION BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who
holds a qualified public school modernization bond on the
credit allowance date of such bond which occurs during the
taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for such taxable year the amount
determined under subsection (b).
``(b) Amount of Credit.--
[[Page S1339]]
``(1) In general.--The amount of the credit determined
under this subsection with respect to any qualified public
school modernization bond is the amount equal to the product
of--
``(A) the credit rate determined by the Secretary under
paragraph (2) for the month in which such bond was issued,
multiplied by
``(B) the face amount of the bond held by the taxpayer on
the credit allowance date.
``(2) Determination.--During each calendar month, the
Secretary shall determine a credit rate which shall apply to
bonds issued during the following calendar month. The credit
rate for any month is the percentage which the Secretary
estimates will on average permit the issuance of qualified
public school modernization bonds without discount and
without interest cost to the issuer.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of
subchapter A (other than subpart C thereof, relating to
refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year.
``(d) Qualified Public School Modernization Bond; Credit
Allowance Date.--For purposes of this section--
``(1) Qualified public school modernization bond.--The term
`qualified public school modernization bond' means--
``(A) a qualified zone academy bond, and
``(B) a qualified school construction bond.
``(2) Credit allowance date.--The term `credit allowance
date' means, with respect to any issue, the last day of the
1-year period beginning on the date of issuance of such issue
and the last day of each successive 1-year period thereafter.
``(e) Other Definitions.--For purposes of this part--
``(1) Local educational agency.--The term `local
educational agency' has the meaning given to such term by
section 14101 of the Elementary and Secondary Education Act
of 1965. Such term includes the local educational agency that
serves the District of Columbia but does not include any
other State agency.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Public school facility.--The term `public school
facility' shall not include any stadium or other facility
primarily used for athletic contests or exhibitions or other
events for which admission is charged to the general public.
``(f) Credit Included in Gross Income.--Gross income
includes the amount of the credit allowed to the taxpayer
under this section and the amount so included shall be
treated as interest income.
``(g) Bonds Held By Regulated Investment Companies.--If any
qualified public school modernization bond is held by a
regulated investment company, the credit determined under
subsection (a) shall be allowed to shareholders of such
company under procedures prescribed by the Secretary.
``SEC. 1397F. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bond.--For purposes of this
part--
``(1) In general.--The term `qualified zone academy bond'
means any bond issued as part of an issue if--
``(A) 95 percent or more of the proceeds of such issue are
to be used for a qualified purpose with respect to a
qualified zone academy established by a local educational
agency,
``(B) the bond is issued by a State or local government
within the jurisdiction of which such academy is located,
``(C) the issuer--
``(i) designates such bond for purposes of this section,
``(ii) certifies that it has written assurances that the
private business contribution requirement of paragraph (2)
will be met with respect to such academy, and
``(iii) certifies that it has the written approval of the
local educational agency for such bond issuance, and
``(D) the term of each bond which is part of such issue
does not exceed 15 years.
``(2) Private business contribution requirement.--
``(A) In general.--For purposes of paragraph (1), the
private business contribution requirement of this paragraph
is met with respect to any issue if the local educational
agency that established the qualified zone academy has
written commitments from private entities to make qualified
contributions having a present value (as of the date of
issuance of the issue) of not less than 10 percent of the
proceeds of the issue.
``(B) Qualified contributions.--For purposes of
subparagraph (A), the term `qualified contribution' means any
contribution (of a type and quality acceptable to the local
educational agency) of--
``(i) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational
equipment),
``(ii) technical assistance in developing curriculum or in
training teachers in order to promote appropriate market
driven technology in the classroom,
``(iii) services of employees as volunteer mentors,
``(iv) internships, field trips, or other educational
opportunities outside the academy for students, or
``(v) any other property or service specified by the local
educational agency.
``(3) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within
a public school) which is established by and operated under
the supervision of a local educational agency to provide
education or training below the postsecondary level if--
``(A) such public school or program (as the case may be) is
designed in cooperation with business to enhance the academic
curriculum, increase graduation and employment rates, and
better prepare students for the rigors of college and the
increasingly complex workforce,
``(B) students in such public school or program (as the
case may be) will be subject to the same academic standards
and assessments as other students educated by the local
educational agency,
``(D) the comprehensive education plan of such public
school or program is approved by the local educational
agency, and
``(E)(i) such public school is located in an empowerment
zone or enterprise community (including any such zone or
community designated after the date of the enactment of this
section), or
``(ii) there is a reasonable expectation (as of the date of
issuance of the bonds) that at least 35 percent of the
students attending such school or participating in such
program (as the case may be) will be eligible for free or
reduced-cost lunches under the school lunch program
established under the National School Lunch Act.
``(4) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) constructing, rehabilitating, or repairing the public
school facility in which the academy is established,
``(B) providing equipment for use at such academy,
``(C) developing course materials for education to be
provided at such academy, and
``(D) training teachers and other school personnel in such
academy.
``(5) Temporary period exception.--A bond shall not be
treated as failing to meet the requirement of paragraph
(1)(A) solely by reason of the fact that the proceeds of the
issue of which such bond is a part are invested for a
reasonable temporary period (but not more than 36 months)
until such proceeds are needed for the purpose for which such
issue was issued. Any earnings on such proceeds during such
period shall be treated as proceeds of the issue for purposes
of applying paragraph (1)(A).
``(b) Limitations on Amount of Bonds Designated.--
``(1) In general.--There is a national zone academy bond
limitation for each calendar year. Such limitation is--
``(A) $400,000,000 for 1998,
``(B) $1,400,000,000 for 1999,
``(C) $1,400,000,000 for 2000, and
``(D) except as provided in paragraph (3), zero after 2000.
``(2) Allocation of limitation.--
``(A) Allocation among states.--
``(i) 1998 limitation.--The national zone academy bond
limitation for calendar year 1998 shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined
by the Office of Management and Budget).
``(ii) Limitation after 1998.--The national zone academy
bond limitation for any calendar year after 1998 shall be
allocated by the Secretary among the States in the manner
prescribed by section 1397G(d); except that, in making the
allocation under this clause, the Secretary shall take into
account Basic Grants attributable to large local educational
agencies (as defined in section 1397G(e)).
``(B) Allocation to local educational agencies.--The
limitation amount allocated to a State under subparagraph (A)
shall be allocated by the State education agency to qualified
zone academies within such State.
``(C) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a)
with respect to any qualified zone academy shall not exceed
the limitation amount allocated to such academy under
subparagraph (B) for such calendar year.
``(3) Carryover of unused limitation.--If for any calendar
year--
``(A) the limitation amount under this subsection for any
State, exceeds
``(B) the amount of bonds issued during such year which are
designated under subsection (a) with respect to qualified
zone academies within such State,
the limitation amount under this subsection for such State
for the following calendar year shall be increased by the
amount of such excess. The preceding sentence shall not apply
if such following calendar year is after 2002.
``SEC. 1397G. QUALIFIED SCHOOL CONSTRUCTION BONDS.
``(a) Qualified School Construction Bond.--For purposes of
this part, the term `qualified school construction bond'
means any bond issued as part of an issue if--
[[Page S1340]]
``(1) 95 percent or more of the proceeds of such issue are
to be used for the construction, rehabilitation, or repair of
a public school facility,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such school is located,
``(3) the issuer designates such bond for purposes of this
section, and
``(4) the term of each bond which is part of such issue
does not exceed 15 years.
Rules similar to the rules of section 1397F(a)(5) shall apply
for purposes of paragraph (1).
``(b) Limitation on Amount of Bonds Designated.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a) by
any issuer shall not exceed the sum of--
``(1) the limitation amount allocated under subsection (d)
for such calendar year to such issuer, and
``(2) if such issuer is a large local educational agency
(as defined in subsection (e)) or is issuing on behalf of
such an agency, the limitation amount allocated under
subsection (e) for such calendar year to such agency.
``(c) National Limitation on Amount of Bonds Designated.--
There is a national qualified school construction bond
limitation for each calendar year. Such limitation is--
``(1) $9,700,000,000 for 1999,
``(2) $9,700,000,000 for 2000, and
``(3) except as provided in subsection (f), zero after
2000.
``(d) Half of Limitation Allocated Among States.--
``(1) In general.--One-half of the limitation applicable
under subsection (c) for any calendar year shall be allocated
among the States under paragraph (2) by the Secretary. The
limitation amount allocated to a State under the preceding
sentence shall be allocated by the State education agency to
issuers within such State and such allocations may be made
only if there is an approved State application.
``(2) Allocation formula.--The amount to be allocated under
paragraph (1) for any calendar year shall be allocated among
the States in proportion to the respective amounts each such
State received for Basic Grants under subpart 2 of part A of
title I of the Elementary and Secondary Education Act of 1965
(20 U.S.C. 6331 et seq.) for the most recent fiscal year
ending before such calendar year. For purposes of the
preceding sentence, Basic Grants attributable to large local
educational agencies (as defined in subsection (e)) shall be
disregarded.
``(3) Minimum allocations to states.--
``(A) In general.--The Secretary shall adjust the
allocations under this subsection for any calendar year for
each State to the extent necessary to ensure that the sum
of--
``(i) the amount allocated to such State under this
subsection for such year, and
``(ii) the aggregate amounts allocated under subsection (e)
to large local educational agencies in such State for such
year,
is not less than an amount equal to such State's minimum
percentage of one-half of the national qualified school
construction bond limitation under subsection (c) for the
calendar year.
``(B) Minimum percentage.--A State's minimum percentage for
any calendar year is the minimum percentage described in
section 1124(d) of the Elementary and Secondary Education Act
of 1965 (20 U.S.C. 6334(d)) for such State for the most
recent fiscal year ending before such calendar year.
``(4) Allocations to certain possessions.--The amount to be
allocated under paragraph (1) to any possession of the United
States other than Puerto Rico shall be the amount which would
have been allocated if all allocations under paragraph (1)
were made on the basis of respective populations of
individuals below the poverty line (as defined by the Office
of Management and Budget). In making other allocations, the
amount to be allocated under paragraph (1) shall be reduced
by the aggregate amount allocated under this paragraph to
possessions of the United States.
``(5) Approved state application.--For purposes of
paragraph (1), the term `approved State application' means an
application which is approved by the Secretary of Education
and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the State with the involvement of local
education officials, members of the public, and experts in
school construction and management) of such State's needs for
public school facilities, including descriptions of--
``(i) health and safety problems at such facilities,
``(ii) the capacity of public schools in the State to house
projected enrollments, and
``(iii) the extent to which the public schools in the State
offer the physical infrastructure needed to provide a high-
quality education to all students, and
``(B) a description of how the State will allocate to local
educational agencies, or otherwise use, its allocation under
this subsection to address the needs identified under
subparagraph (A), including a description of how it will--
``(i) give highest priority to localities with the greatest
needs, as demonstrated by inadequate school facilities
coupled with a low level of resources to meet those needs,
``(ii) use its allocation under this subsection to assist
localities that lack the fiscal capacity to issue bonds on
their own, and
``(iii) ensure that its allocation under this subsection is
used only to supplement, and not supplant, the amount of
school construction, rehabilitation, and repair in the State
that would have occurred in the absence of such allocation.
Any allocation under paragraph (1) by a State education
agency shall be binding if such agency reasonably determined
that the allocation was in accordance with the plan approved
under this paragraph.
``(e) Half of Limitation Allocated Among Largest School
Districts.--
``(1) In general.--One-half of the limitation applicable
under subsection (c) for any calendar year shall be allocated
under paragraph (2) by the Secretary among local educational
agencies which are large local educational agencies for such
year. No qualified school construction bond may be issued by
reason of an allocation to a large local educational agency
under the preceding sentence unless such agency has an
approved local application.
``(2) Allocation formula.--The amount to be allocated under
paragraph (1) for any calendar year shall be allocated among
large local educational agencies in proportion to the
respective amounts each such agency received for Basic Grants
under subpart 2 of part A of title I of the Elementary and
Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for
the most recent fiscal year ending before such calendar year.
``(3) Large local educational agency.--For purposes of this
section, the term `large local educational agency' means,
with respect to a calendar year, any local educational agency
if such agency is--
``(A) among the 100 local educational agencies with the
largest numbers of children aged 5 through 17 from families
living below the poverty level, as determined by the
Secretary using the most recent data available from the
Department of Commerce that are satisfactory to the
Secretary, or
``(B) 1 of not more than 25 local educational agencies
(other than those described in clause (i)) that the Secretary
of Education determines (based on the most recent data
available satisfactory to the Secretary) are in particular
need of assistance, based on a low level of resources for
school construction, a high level of enrollment growth, or
such other factors as the Secretary deems appropriate.
``(4) Approved local application.--For purposes of
paragraph (1), the term `approved local application' means an
application which is approved by the Secretary of Education
and which includes--
``(A) the results of a recent publicly-available survey
(undertaken by the local educational agency with the
involvement of school officials, members of the public, and
experts in school construction and management) of such
agency's needs for public school facilities, including
descriptions of--
``(i) the overall condition of the local educational
agency's school facilities, including health and safety
problems,
``(ii) the capacity of the agency's schools to house
projected enrollments, and
``(iii) the extent to which the agency's schools offer the
physical infrastructure needed to provide a high-quality
education to all students,
``(B) a description of how the local educational agency
will use its allocation under this subsection to address the
needs identified under subparagraph (A), and
``(C) a description of how the local educational agency
will ensure that its allocation under this subsection is used
only to supplement, and not supplant, the amount of school
construction, rehabilitation, or repair in the locality that
would have occurred in the absence of such allocation.
A rule similar to the rule of the last sentence of subsection
(d)(5) shall apply for purposes of this paragraph.
``(f) Carryover of Unused Limitation.--If for any calendar
year--
``(1) the amount allocated under subsection (d) to any
State, exceeds
``(2) the amount of bonds issued during such year which are
designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State
for the following calendar year shall be increased by the
amount of such excess. A similar rule shall apply to the
amounts allocated under subsection (e). The subsection shall
not apply if such following calendar year is after 2002.''.
(b) Reporting.--Subsection (d) of section 6049 of such Code
(relating to returns regarding payments of interest) is
amended by adding at the end the following new paragraph:
``(8) Reporting of Credit on Qualified Public School
Modernization Bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest` includes amounts includible in gross income under
section 1397E(f) and such amounts shall be treated as paid on
the credit allowance date (as defined in section
1397E(d)(2)).
``(B) Reporting to corporations, etc.--Except as otherwise
provided in regulations, in the case of any interest
described in subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without regard to
subparagraphs (A), (H), (I), (J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may prescribe
such regulations as are necessary or appropriate to carry out
the purposes of this paragraph, including regulations which
require more frequent or more detailed reporting.''
[[Page S1341]]
(c) Clerical Amendments.--
(1) The table of parts for subchapter U of chapter 1 of
such Code is amended by striking the item relating to part IV
and inserting the following new item:
``Part IV. Incentives for qualified public school modernization
bonds.''.
(2) Part V of subchapter U of chapter 1 of such Code is
amended by redesignating both section 1397F and the item
relating thereto in the table of sections for such part as
section 1397H.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to obligations
issued after December 31, 1998.
(2) Repeal of restriction on zone academy bond holders.--
The repeal of the limitation of section 1397E of the Internal
Revenue Code of 1986 (as in effect on the day before the date
of the enactment of this Act) to eligible taxpayers (as
defined in subsection (d)(6) of such section) shall apply to
obligations issued after December 31, 1997.
____
Bill Summary
The Public School Modernization Act creates and expands tax
incentives to help States and school districts meet their
school modernization and construction priorities. The bill
includes two major provisions.
Qualified school modernization bonds
The bill allows state and local governments to issue
``qualified school modernization bonds'' to fund the
construction, modernization, and rehabilitation of public
schools. Bondholders, instead of receiving interest, would
receive annual Federal income tax credits. The maximum term
of the bonds would be 15 years.
A total of $9.7 billion of authority to issue qualified
school modernization bonds would be allowed in each of 1999
and 2000, half to States and half to the 100 school districts
with the largest numbers of poor children (The District of
Columbia is considered a State.) The authority allocated to
the 100 large districts would be based on the amounts of
Federal assistance received under Title I, Basic Grants. In
addition, the Secretary of Education would have the authority
to designate 25 additional districts to receive bond
authority directly from the Federal government. The authority
allocated to States would also be based on the State's share
of Title I, Basic Grants, excluding the 100 large districts
and any others designated by the Secretary to receive bond
authority directly from the Federal government. A small
portion of the total amount of bond authority would be set
aside for each U.S. possession (other than Puerto Rico, which
is considered a State) based on its share of the total U.S.
poverty population. A State, possession, or eligible school
district would be permitted to carry forward any unused
portion of its allocation until September 30, 2003.
Under the proposal, a bond would be treated as a qualified
school modernization bond if three requirements are met.
First, the Department of Education must approve a school
construction plan of the State, territory, or school district
that: (1) demonstrates that a survey has been undertaken of
the construction and renovation needs in the jurisdiction,
(2) describes how the jurisdiction will assure that bond
proceeds are used for the purposes of this proposal, and (3)
explains how it will use its allocation to assist localities
that lack the fiscal capacity to issue bonds on their own.
Second, the issuing government must receive an allocation for
the bond from the State, territory, or eligible district.
Third, 95 percent or more of the bond proceeds must be used
to construct or rehabilitate public school facilities.
Qualified Zone Academy Bonds
The bill makes three changes to the existing qualified zone
academy bonds (created in the Taxpayer Relief Act of 1997).
First, the bill increases the 1999 bond cap from $400 million
to $1.4 billion and adds an additional $1.4 billion of bond
cap in 2000. Second, the bill expands the list of permissible
uses of proceeds to include new school construction. Third,
the bill sets the maximum term of qualified zone academy
bonds at 15 years.
Qualified zone academy bonds can be used by school
districts, starting this year, for school improvement
purposes. The subsidy mechanism is the same as with the new
school modernization bonds--Federal tax credits to
bondholders in lieu of interest--but there are several
requirements associated with zone academy bonds. First,
schools must secure 10% of the funding for the school
improvement project from the private sector before issuing
the zone academy bonds. Second, the school must work with the
private sector to enhance the curriculum and increase
graduation rates and employment rates. Finally, in order to
be eligible, the school must either have 35% of students
eligible for the free- and reduced-price lunch program, or be
located in an empowerment zone or enterprise community.
cost
The Joint Committee on Taxation estimates the total cost of
this proposal is $3.3 billion/5 years and $9 billion/10
years. The Department of Treasury estimates the cost is $5
billion/5 years.
The proposal is fully paid for within President Clinton's
balanced budget.
Mr. KENNEDY. Mr. President, I am honored to be a sponsor of the
Public School Modernization Act of 1998, introduced today by Senator
Moseley-Braun to help communities across the country in their struggle
to modernize, repair, and rebuild their school facilities.
Schools across the nation face serious problems of overcrowding.
Antiquated facilities are suffering from physical decay, and are not
equipped to handle the needs of modern education.
Across the country, 14 million children in a third of the nation's
schools are learning in substandard buildings. Half the schools have at
least one unsatisfactory environmental condition. It will take over
$100 billion just to repair existing facilities nationwide.
Massachusetts is no exception. 41% of our schools across the state
report that at least one building needs extensive repair or should be
replaced. Three-quarters report serious problems in buildings, such as
plumbing or heating defects. 80% have at least one unsatisfactory
environmental factor.
In Boston, many schools cannot keep their heating systems functioning
properly. On a given day, 15 to 30 schools complain that their heat is
not working.
The leaking roof at Revere High School is so serious that the new
fire system is threatened. School Committee members estimate that
fixing the roof will cost an additional $1 million, and they don't know
where to get the money.
It is difficult enough to teach or learn in dilapidated classrooms.
But now, because of escalating enrollments, those classrooms are
increasingly overcrowded. The nation will need 6,000 new schools in the
next few years, just to maintain current class sizes.
State governments and local communities are working hard to meet
these challenges. In Massachusetts, under the School Building
Assistance Act, the state will pay 50-90% of the most severe needs. 124
schools now have approved projects, and are on a waiting list for
funding. The state share should be $91 million this year, but only $35
million is available. More than 50 other projects are awaiting
approval. With that kind of deficit at the state and local level, it is
clear that the federal government has a responsibility to act.
I am pleased that President Clinton has made this issue one of his
highest priorities. The legislation we are introducing will allow
states and local governments to issue $22 billion in bonds over the
next five years for school repairs and construction. Half of the amount
will go to state governments, and the other half will go to the 100
cities across the nation with the largest numbers of low-income
children, including Boston and Springfield. The bonds will be interest-
free for the states and cities--Uncle Sam will pay the interest.
Under this plan, the state government in Massachusetts can issue $230
million in bonds for construction and renovation of school buildings.
The City of Boston can issue an additional $90 million, and the City of
Springfield can issue an additional $36 million, so that a total of
$356 million in bonds will be available to help Massachusetts schools
under this legislation.
Good teaching and good schools are threatened if school buildings are
unsafe and need repairs. President Clinton has made it a top priority
to see that America has the best public schools in the world. And my
Democratic colleagues and I intend to do all we can to see that we
reach that goal.
Investing in schools is one of the best investments America can
possibly make. For schools across America, help is truly on the way--
and it can't come a minute too soon.
______
By Mr. BINGAMAN:
S. 1706. A bill to amend title 23, United States Code, to encourage
States to enact laws that ban the sale of alcohol through a drive-up or
drive-through sales window; to the Committee on Environment and Public
Works.
the drunk driving casualty prevention act of 1998
Mr. BINGAMAN. Mr. President, I rise briefly to discuss a very
important matter relating to the safety of our Nation's streets and
highways, DWI-related injuries and fatalities. This is a problem that
in spite of many prevention efforts, remains a serious concern.
The statistics are compelling. For example, on Thanksgiving,
Christmas, New Years Eve, and New Years Day
[[Page S1342]]
1996, there were 576 DWI-related fatalities on our Nation's highways.
In that same year, nearly 1.1 million people were injured in alcohol-
related crashes. Motor vehicle crashes are the leading cause of death
for 15- to 20-year-olds. About 3 in 10 Americans will be involved in an
alcohol-related crash at some time in their lives. Alcohol-related
crashes cost society $45 billion annually. To make matters worse, the
loss of quality of life and pain and suffering costs total over $134
billion annually.
My home state of New Mexico is not exempt. In fact, the National
Traffic Safety Administration reports that New Mexico leads the country
in DWI-related deaths per capita, a rate of 11.79 deaths per 100,000
people. This rate is 19 percent higher than the No. 2 state,
Mississippi, and is more than twice the national rate of 5.05 deaths
per 100,000.
Indeed, these statistics paint a very grim picture. What makes this
picture even more tragic, Mr. President, is that DWI-related injuries
and fatalities are preventable. It clearly is within our national
interest to do everything we can to reverse this course. One obvious
way to prevent further deaths on our highways is to ensure the sobriety
of drivers. That is why I proudly am co-sponsoring Senator Lautenberg's
and Senator DeWine's bill to establish a national blood-alcohol content
standard of .08. Additionally, I am cosponsoring Senator Dorgan's bill
to prohibit open containers of alcohol in automobiles. I urge my Senate
colleagues to help pass these bills this year.
Another contributing factor to the problem that I believe would make
a significant difference if eliminated is the practice of selling
alcohol beverages through drive-up sales windows. This practice only
makes it more easy for a drunk driver to purchase alcohol, and it
contributes heavily to the DWI-fatality rate in New Mexico. Eliminating
these drive-up liquor windows is essential to reducing these injuries
and fatalities.
When I was in New Mexico 2 weeks ago, I held a series of seminars
with high school students from throughout the state, and I listened to
their concerns about the problems in the state and in the country. One
young man, Simon Goldfine, who is a student at Del Norte High School in
Albuquerque, agreed that the DWI rate in New Mexico is much too high,
and one reason he explained is these drive-in liquor windows. Simon
explained that if a drunk person has to walk into a liquor store, it
will be easier to determine if he is drunk than if he simply sat in his
vehicle. And Simon asked if something could be done to eliminate the
windows. Today I would like to tell Simon that we will do something
about it.
Today, at Simon's urging, I am introducing legislation, the Drunk
Driving Casualty Prevention Act of 1998 to prohibit the sale of alcohol
through drive-up sales windows.
Mr. President, I believe no one in America will disagree with Simon
that this ban will make a difference. According to one study, there are
26 states that do not permit drive-up windows. In 1996, these states
had a 15 percent lower average drunk driving fatality rate than the 24
states that permit these windows. In the states with the ban, the
average rate was 4.6 per 100,000 people, as opposed to 5.46 in all
other states. On a percentage basis, states with a ban had a 14.5
percent lower drunk driving fatality rate than states that permit sales
windows.
In 1996, comparing 19 western states in particular, the nine states
with a ban had a 31 percent lower average drunk driving fatality rate
than the ten states that permit the windows.
In 1995, there were 231 drunk driving fatalities in New Mexico. Based
on the 14-percent lower drunk driving fatality rate, it is estimated
that closing drive-up liquor windows could save between 32 and 35 lives
annually in New Mexico. Nowhere is it more true that if we can save one
life by closing these windows, we should do it.
The differences can be explained because there are three main
benefits to closing drive-up liquor windows: first, it is easier and
more accurate to check IDs over the sales counter. Minors have
testified that it is very easy to illegally purchase alcohol at a
drive-up window where it is difficult to determine their age. Second,
it is easier to visually observe a customer for clues that they are
impaired by alcohol or other substance if they have to walk into a
well-lit establishment to make their purchase. Moreover, in one
municipal court in New Mexico, 33 percent of DWI offenders reported
having purchased their liquor at drive up windows. Some members of
Alcoholics Anonymous say they now realize they could have known each
other years earlier if they had only looked in their rear view mirror
while in line at a drive-up window. And third, it sends a clear message
to the population that drinking and driving will not be tolerated.
The Behavior Health Research Center of the Southwest conducted a
study, the purpose of which was to determine the characteristics and
arrest circumstances of DWI offenders who bought alcohol at a drive-up
liquor window compared to those who obtained alcohol elsewhere. Nearly
70 percent of offenders studied reported having purchased the alcohol
they drank prior to arrest. Of those offenders, 42 percent bought
package liquor, and of those offenders, the drive-up window was the
preferred place of purchase. Additionally, the study showed that drive-
up window users were 68 percent more likely to have a serious alcohol
problem than other offenders. Drive-up window users also are 67 percent
more likely to be drinking in their vehicle prior to arrest than other
offenders. This study showed that drive-up windows facilitate alcohol
misuse in vulnerable populations. The persons most affected are the
high-risk problem drinkers, and when liquor availability is restricted,
it is among those offenders that use, and consequently alcohol-related
offenses, declines the most.
There are some that may contend that closing these windows is going
to hurt small businesses. To the contrary. Closing these drive-up
liquor windows will actually help increase profits, and it is very easy
to explain. When a customer has to walk into an establishment, he or
she is very likely to purchase more than the original item. The
customer is likely to pick up, for example, potato chips, sodas, and
magazines. This is not as likely to happen at the drive-up window
simply because the customers cannot see the items from their vehicle.
In McKinley County, New Mexico, which is the only county in New Mexico
to ban these windows, businesses actually saw a jump in profits. Most
importantly, because of its DWI prevention strategy, McKinley County's
alcohol-related injury and fatality rate dropped from 272 per 100,000
in 1989 to 183 per 100,000 in 1997.
Mr. President, I believe we have a great opportunity here to reduce
DWI injuries and fatalities. Therefore, I plan to offer this bill as an
amendment to the ISTEA legislation, and I urge my Senate colleagues to
join me. I ask unanimous consent that the rest 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. 1706
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. BAN ON SALE OF ALCOHOL THROUGH DRIVE-UP OR DRIVE-
THROUGH SALES WINDOWS.
(a) In General.--Chapter 1 of title 23, United States Code,
is amended by inserting after section 153 the following:
``Sec. 154. Ban on sale of alcohol through drive-up or drive-
through sales windows
``(a) Withholding of Apportionments for Noncompliance.--
``(1) Fiscal year 2000.--The Secretary shall withhold 5
percent of the amount required to be apportioned to any State
under each of paragraphs (1)(A), (1)(C), and (3) of section
104(b) on October 1, 1999, if the State does not meet the
requirements of paragraph (3) on that date.
``(2) Subsequent fiscal years.--The Secretary shall
withhold 10 percent (including any amounts withheld under
paragraph (1)) of the amount required to be apportioned to
any State under each of paragraphs (1)(A), (1)(C), and (3) of
section 104(b) on October 1, 2000, and on October 1 of each
fiscal year thereafter, if the State does not meet the
requirements of paragraph (3) on that date.
``(3) Requirements.--A State meets the requirements of this
paragraph if the State has enacted and is enforcing a law
(including a regulation) that bans the sale of alcohol
through a drive-up or drive-through sales window.
``(b) Period of Availability; Effect of Compliance and
Noncompliance.--
``(1) Period of availability of withheld funds.--
``(A) Funds withheld on or before september 30, 2002.--Any
funds withheld under
[[Page S1343]]
subsection (a) from apportionment to any State on or before
September 30, 2002, shall remain available until the end of
the third fiscal year following the fiscal year for which the
funds are authorized to be appropriated.
``(B) Funds withheld after september 30, 2002.--No funds
withheld under this section from apportionment to any State
after September 30, 2002, shall be available for
apportionment to the State.
``(2) Apportionment of withheld funds after compliance.--
If, before the last day of the period for which funds
withheld under subsection (a) from apportionment are to
remain available for apportionment to a State under paragraph
(1)(A), the State meets the requirements of subsection
(a)(3), the Secretary shall, on the first day on which the
State meets the requirements, apportion to the State the
funds withheld under subsection (a) that remain available for
apportionment to the State.
``(3) Period of availability of subsequently apportioned
funds.--
``(A) In general.--Any funds apportioned under paragraph
(2) shall remain available for expenditure until the end of
the third fiscal year following the fiscal year in which the
funds are so apportioned.
``(B) Treatment of certain funds.--Sums not obligated at
the end of the period referred to in subparagraph (A) shall
lapse.
``(4) Effect of noncompliance.--If, at the end of the
period for which funds withheld under subsection (a) from
apportionment are available for apportionment to a State
under paragraph (1), the State does not meet the requirements
of subsection (a)(3), the funds shall lapse.''.
(b) Conforming Amendment.--The analysis for chapter 1 of
title 23, United States Code, is amended by inserting after
the item relating to section 153 the following:
``154. Ban on sale of alcohol through drive-up or drive-through sales
windows.''.
______
By Ms. MIKULSKI (for herself, Mr. Kennedy, Mr. Durbin, Mr.
Bumpers, and Mr. Byrd)
S. 1707. A bill to amend the Federal Food, Drug, and Cosmetic Act to
provide for improved safety of imported foods; to the Committee on
Labor and Human Resources.
the safety of imported food act of 1998
Ms. MIKULSKI. Mr. President, I rise today to introduce the ``Safety
of Imported Food Act of 1998.'' I am proud to be the sponsor of this
important legislation to provide the American people with safer
imported foods. This legislation is part of President Clinton's food
safety initiative. Its purpose is to provide for improved safety of
imported food consistent with U.S. food safety requirements.
The bill expands FDA authority to ensure the safety of imported foods
in two very important ways. It authorizes the Secretary to deny entry
of imported food products if it is determined that the products do not
meet the U.S. food safety requirements. It also authorizes the
secretary to consider, in determining whether imported food products
meet U.S. food safety requirements, a refusal to allow necessary
inspections or testing.
Our nation's food supply has gone global. Once our imported food
consisted mainly of bulk staples. Now we import growing quantities of
fresh fruits and vegetables, seafood, and many other foods. Thirty-
eight percent of all fruit and 12% of all vegetables consumed in the
U.S. are imported. Imported food entries doubled in the last 7 years
and a 30% increase is expected by 2002.
We have been put on alert by recent cases of food borne illness.
Michigan school children were sickened by imported strawberries
contaminated by Hepatitis A. There have been widespread reports of
cyclospora from imported raspberries. Soft cheese from Europe has been
found to be contaminated with listeria and salmonella. And radish seed
sprouts from the Far East have been found infected with Ecoli 0157:H7.
The impact of unsafe food is staggering. As many as 33 million people
become ill each year from contaminated meat, poultry and produce. Over
$3 billion are spent in hospitalization due to food related illness.
Added to that are the losses in productivity.
Now that our food supply has gone global, our food safety measures
must go global as well. Current authority requires FDA to rely on
inspection and testing at the border to ensure that safety standards
are met. With the ever increasing quantities of imported foods, it is
impossible for FDA to inspect more than a small percentage of
shipments. Additionally, such inspections are often impractical, given
the perishable nature of many of the imported foods. The FDA may also
place more general restrictions on imports, but only after a problem
has surfaced, often after a major outbreak of illness has occurred.
Both of these types of measures address the problem of unsafe food
reactively.
The ``Safety of Imported Food Act'' places the emphasis on the
underlying food system of control at the food source, a more preventive
means of addressing food safety. It focuses on the conditions that
cause problems rather than the problem once it has occurred. By
allowing FDA to consider the food safety system in place, the bill
provides the means by which FDA can use its limited resources more
efficiently.
There are several things this bill does not do. It does not shut our
borders or immediately deny entry of imported food upon enactment. It
does not require inspections or access without consent. In fact, it
does not create any new inspection authority, either foreign or
domestic.
The bill is short, but what it will achieve is significant. It will
provide FDA with authority to ensure that all imported foods meet the
U.S. level of protection, consistent with rights and obligations under
international trade agreements. It provides FDA with a more effective
enforcement tool and the ability to use its resources more effectively.
Under the bill, foreign producers may have an incentive to upgrade
their food safety systems. Most importantly, the bill will provide the
American public with greater assurance that imported foods meet the
same safety standards as do foods produced in the U.S.
I wish to commend President Clinton and Vice President Gore in making
food safety a top priority. By strengthening the food supply both here
and abroad, I believe we make the world a safer place to live. I look
forward to the Senate's support of this important legislation.
______
By Mr. DASCHLE (for himself, Mrs. Murray, Ms. Moseley-Braun, Mr.
Kennedy, Mr. Dodd, Mrs. Boxer, Mr. Breaux, Mr. Robb, Mr. Levin,
Mr. Lautenberg, Mr. Glenn, Mr. Kerry, Mrs. Feinstein, Mr. Reid,
Mr. Reed and Mr. Bryan):
S. 1708. A bill to improve education; to the Committee on Labor and
Human Resources.
the revitalize and empower public school communities to upgrade for
long-term success act
Mr. DASCHLE. Mr. President, today I am introducing on behalf of my
colleagues, Senators Murray, Moseley-Braun, Kennedy, Dodd, Boxer,
Breaux, Robb, Levin, Lautenberg, Glenn, Kerry, Feinstein, Reid, Reed,
Bryan and myself, legislation that puts the spotlight directly on our
efforts to strengthen and modernize our nation's public schools.
We recognize that a strong public education system is the key to
America's future. Our economic prosperity, our position as a world
leader, our system of law, and our very democracy require that all of
our children have access to the best possible education.
We have heard a lot over the last 20 years about the things that are
wrong with education in this country, and there's no question that we
need to do some things better. We just learned the other day, for
example, that our 12th graders are behind the rest of the world in math
and science achievement. That is unacceptable and must be corrected.
But there are signs that we have been able to make some progress. Our
fourth-graders are well above the average in mathematics and near the
top in science. And there are innovative programs springing up around
the country that are taking advantage of federal funds to make
remarkable changes in the way public schools are run. The City of
Chicago, for example, has taken dramatic steps including ending social
promotions, raising their standards, and providing extra help to make
sure that children can achieve those standards. Parents and community
members are more involved , and, while it's too early to see results in
terms of test scores, there are dramatic improvements in attendance.
Those who are involved are amazed at their progress.
Despite many local improvements, our schools still face many
challenges. Student enrollments are at record high levels and are
expected to increase over
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the next decade. This growth, combined with aging buildings and the
demand of technology, is straining many school facilities. Growing
enrollments and teacher retirements also mean that more than 2 million
new teachers will be needed over the next decade. The quality of those
teachers will have a significant impact on student achievement levels.
Recent advancements require better integration of technology in our
public schools and better training for instructors in using technology
effectively in the classroom. While many schools have implemented
reforms and student performance is improving in some communities, too
many children, particularly those from low-income families, are still
not learning up to their potential.
The legislation we are introducing today--the RESULTS Act--will
addresses these issues in 5 ways:
(1) We create a new tax credit to help communities offset the cost of
school construction and modernization;
(2) We provide funds to help communities reduce class sizes in grades
1 through 3 by hiring and training 100,000 new teachers;
(3) We help communities establish additional after-school programs
for school-aged children;
(4) We advance the federal commitment to integrate technology into
the classroom and provide resources to train teachers to use that
technology effectively; and
(5) We include the President's initiative to provide grants to high-
poverty urban and rural school districts that are serious about
carrying out standards-based reforms, such as those occurring in
Chicago, to improve student achievement.
Mr. President, Democrats recognize that the federal government has an
important role to play in encouraging all Americans--including parents,
teachers, business and community leaders, and elected officials at all
levels of government--to work in partnership to strengthen and
revitalize our public schools. Our nation's commitment to a strong
system of public education has made our country great. We renew that
commitment today with this plan to prepare our students to lead this
country into the 21st Century. I thank my colleagues who have worked
with me to demonstrate our resolve to modernize and strengthen our
public schools and invite our colleagues across the aisle to make the
same commitment and join us to enact the important legislation.
I ask unanimous consent that a title-by-title explanation of the
bill, be printed in the Record.
There being no objection, the summary was ordered to be printed in
the Record, as follows:
S. 1708--Summary
TITLE I--HELPING COMMUNITIES RENOVATE AMERICA'S SCHOOLS
The General Accounting Office has found severe school
disrepair in all areas of the United States. More than 14
million children attend schools in need of extensive repair
or replacement. The repair backlog totals at least $112
billion, and this does not include expansions needed to
accommodate enrollment increases, class size reductions, and
integration of technology in the classroom. The problem
transcends demographic and geographic boundaries. For 38
percent of urban schools, 30 percent of rural schools, and 29
percent of suburban schools, at least 1 building is in need
of extensive repair or should be completely replaced.
The condition of school facilities has a direct effect on
the safety of students and teachers, and on the ability of
students to learn. Researchers at Georgetown University found
the performance of students assigned to schools in poor
condition falls 10.9 percentage points below those attending
classes in buildings in excellent condition. Other studies
have demonstrated up to a 20 percent improvement in test
scores when students were moved from a dilapidated facility
to a new facility.
This Title includes 2 initiatives to expand tax incentives
to help states and school districts address the school
construction backlog.
Qualified School Modernization Bonds
State and local governments will issue qualified school
modernization bonds to fund the construction, modernization,
and rehabilitation of public schools. Bondholders will
receive annual Federal income tax credits in lieu of
interest. The maximum term of the bonds will be 15 years.
A total of $9.7 billion of authority to issue qualified
school modernization bonds is allocated in 1999 and 2000--50
percent to states and 50 percent to the 100 largest school
districts. The authority allocated to the 100 largest
districts will be based on the amounts of Federal assistance
received under Title I, Basic Grants. In addition, the
Secretary of Education will have the authority to designate
25 additional districts to receive bond authority directly
from the Federal government. The authority allocated to
States will also be based on the State's share of Title I,
Basic Grants, excluding the 100 large districts and any
others designated by the Secretary to receive bond authority
directly from the Federal government.
I should note that I would prefer to provide more funds to
the states to make sure that rural areas, many of which are
severely limited financially, have access to the funds they
need to modernize their schools as well. However, this bill
reflects a joint House and Senate Democrats and White House
initiative, so I have not made that change in this bill.
To be treated as a qualified school modernization bond
program, 3 requirements must be met. First, the Department of
Education must approve a school construction plan of the
state, territory, or school district that: (1) demonstrates a
survey of the construction and renovation needs in the
jurisdiction has been undertaken; (2) describes how the
jurisdiction will assure that bond proceeds are used for the
purposes of this proposal; and (3) explains how it will use
its allocation to assist localities that lack the fiscal
capacity to issue bonds on their own. Second, the issuing
government must receive an allocation for the bond from the
State, territory, or eligible district. Third, 95 percent
or more of the bond proceeds must be used to construct or
rehabilitate public school facilities.
qualified zone academy bonds
The bill makes 3 changes to the existing qualified zone
academy bonds (created in the Taxpayer Relief Act of 1997).
First, the bill increases the 1999 bond cap from $400 million
to $1.4 billion and adds an additional $1.4 billion of bond
cap in 2000. Second, the bill expands the list of permissible
uses of proceeds to include new school construction. Third,
the bill sets the maximum term of qualified zone academy
bonds at 15 years. The subsidy mechanism is the same as with
the new school modernization bonds--Federal tax credits to
bondholders in lieu of interest--but there are several
requirements associated with zone academy bonds. First,
schools must secure 10 percent of the funding for the school
improvement project from the private sector before issuing
the zone academy bonds. Second, the school must work with the
private sector to enhance the curriculum and increase
graduation and employment rates. Finally, in order to be
eligible, the school must either have 35 percent of students
eligible for the free- and reduced-price lunch program, or be
located in an Empowerment zone or enterprise community.
TITLE II--REDUCING CLASS-SIZE
Qualified teachers in small classes can provide students
with more individualized attention, spend more time on
instruction and less on other administrative tasks, cover
more material more effectively, and work more closely with
parents. Research has shown that students attending small
classes in the early grades make better progress than
students in larger classes, and that those achievement gains
persist through at least the eighth grade. The benefits are
greatest for low-achieving, minority, poor, and inner-city
children. Smaller classes also allow teachers to identify and
work earlier with students who have learning disabilities,
potentially reducing those students' need for special
education in later grades.
Efforts to reduce class sizes are likely to be successful
only if well-qualified teachers are hired to fill additional
classroom positions, and if teachers receive intensive,
ongoing training in teaching effectively in smaller classroom
settings. Currently, 1 in 4 high school teachers do not have
a major or minor in the main subject they teach. This is true
for more than 30 percent of math teachers. In schools with
the highest minority enrollments, students have less than a
50 percent chance of getting a science or math teacher who
holds a degree in that field.
Over the next decade, we will need to hire over 2 million
teachers to meet increasing student enrollments and teacher
retirements. Comprehensive improvements in teacher
preparation and development are needed to ensure students'
academic success. Too many teachers graduating today have
insufficient experience in the classroom or are unprepared to
integrate technology into their lessons. The federal
government can assist in this effort by providing resources
to help communities reduce class sizes and improve the
quality of teacher training.
This program is designed to help states and local
educational agencies recruit, train, and hire 100,000
additional qualified teachers in order to reduce class sizes
nationally, in grades 1 to 3 to an average of 18 students per
classroom. In addition, the program provides resources to
improve small classroom teaching in the early grades so that
all students can learn to read well and independently by the
end of the third grade. Funding of $1.1 billion will be
appropriated in the first year and $7.3 billion over 5 years.
I want to emphasize that our proposal is aimed at improving
the quality of teaching, not just the quantity of teachers.
This is critical if we expect to see improvements in student
achievement.
[[Page S1345]]
TITLE III--EXPANDING AFTER-SCHOOL CARE
Many children spend more of their waking hours without
supervision and constructive activity than they do in school.
As many as 5 million children are home alone after school
each week. Too many of these children are tempted during this
time to try cigarettes, alcohol, marijuana and engage in
other dangerous activities. The law enforcement community,
which has been very active in their efforts to focus our
attention on this problem, reports that most juvenile
involvement in crime--either committing them or becoming
victims themselves--occurs between 3 p.m. and 8 p.m. Children
who attend quality after-school programs, on the other hand,
tend to do better in school, get along better with their
peers, and are less likely to engage in delinquent behaviors.
Unfortunately, only one-third of the schools in low-income
neighborhoods and half of the schools in affluent areas
currently offer after-school programs. Expansion of both
school-based and community-based after-school programs is key
to providing safe, constructive environments for children and
helping communities reduce the incidence of juvenile
delinquency and crime.
This bill expands the 21st Century Learning Centers Act and
provides $200 million each fiscal year to help communities
develop after-school care programs. Grantees will be required
to offer expanded learning opportunities for children and
youth in the community. Funds could be used to provide:
(1) literacy programs;
(2) integrated education, health, social service,
recreational or cultural programs;
(3) summer and weekend school programs;
(4) nutrition and health programs;
(5) expanded library services;
(6) telecommunications and technology education programs;
(7) services for individuals with disabilities;
(8) job skills assistance;
(9) mentoring;
(10) academic assistance; and
(11) drug, alcohol, and gang prevention activities.
While expanding after-school programs in public schools
will help hundreds of thousands of children. It is important
to note that many other community-based organizations,
including YMCAs, and Campfire Boys and Girls, provide high
quality programs for children as well. These programs also
need and deserve federal assistance, since it is unlikely
that schools will be able to meet the needs of all children.
While school-based care is the focus of this legislation,
many Democratic senators and I also strongly support
providing additional resources for after-school care through
other programs, and we would also like to see greater
coordination among all federal, state, and local programs in
order to maximize the effective use of public resources and
encourage more collaborative efforts at the local level.
TITLE IV--PROMOTING EFFECTIVE USE OF TECHNOLOGY IN THE CLASSROOM
Americans agree that integrating technology effectively in
the classroom must be a central component of preparing
students for the 21st Century. Fully 74 percent of Americans
believe that computers improve the quality of education and
half believe their public schools offer too little access to
adequate computers.
The importance of strengthening students' technology skills
cannot be underestimated. Nearly one quarter of the jobs
added to our economy in the past year were in technology-
based occupations. By the year 2000, 60 percent of all jobs
in the nation will require skills in computer and network
use. Just 22 percent of all workers have those skills today.
Incorporating technology effectively in the classroom has
been proven to improve students' mastery of basic skills,
test scores, writing, and engagement in school. With these
gains comes a decrease in dropout rates, as well as fewer
attendance and discipline problems.
We are making progress. While only 35 percent of schools
had access to the internet in 1996, now 78 percent are on-
line. The Schools and Libraries Universal Service Fund, or
``E-rate,'' will provide up to $2.25 billion annually in
discounts to assure every American school and library access
to telecommunications services, internal connection, and
Internet access. More than 20,000 schools and libraries have
already applied to participate in this program. The National
Governors' Association has urged Congress to maintain the
integrity of the E-rate, and provide adequate funding for
this important program now.
Many states and localities are taking good advantage of
other Federal programs such as the Technology Literacy
Challenge Fund, Technology Innovation Challenge Grants, Star
Schools and other programs to obtain equipment and wire
schools. Additional resources are needed to continue this
effort as well as help train teachers in the effective use of
technology in the classroom.
This legislation states that it is in the Nation's interest
to invest at least $4 billion in funding for Department of
Education technology programs between fiscal years 1999 and
2003.
We also require schools and libraries participating in the
E-rate to establish policies to limit access to inappropriate
material. Our bill also includes several measures to increase
Federal resources to improve professional development and
help teachers integrate technology into the classroom. Under
our proposal, 30 percent of National Challenge Grant for
Technology grants will be directed to partnerships that are
focused on developing effective teaching strategies. To
improve training and preparation of teaching candidates and
new teachers, the Secretary will be authorized to award
grants to partnerships that train candidates and education
school faculty in the effective use and integration of
technology in teaching academic subjects.
The bill establishes $75 million in grants to be managed
jointly by the Office of Education Research and Innovation
and the National Science Foundation to support innovative
research in education technology, development of research
results in partnerships with the private sector, and
evaluation that identifies the most effective approaches to
implementing education technology.
TITLE V--EDUCATION OPPORTUNITY ZONES
Students in schools where a high proportion of children
come from lower-income families begin school behind their
peers academically and, too often, never catch up with their
peers. Later on, they are less likely to go to college and
more likely to experience unemployment. High levels of
poverty and the lack of resources has resulted in watered
down curricula, lowered expectations for their students, and
fewer qualified teachers. These challenges are compounded in
high-poverty rural schools because of their isolation and
small size.
Some high-poverty schools have shown, however, that
students can achieve more if the schools adopt high standards
for students, teachers and administrators, provide extra help
to students, adopt proven systemic reforms, and hold schools,
staff, and students accountable for the results.
This program will provide $200 million in FY1999 and $1.5
billion over 5 years to high-poverty urban and rural school
districts that are serious about carrying out standards-based
reform plans to improve the academic achievement. Grants will
be awarded to approximately 50 districts that:
(1) agree to adopt high standards, test student
achievement, and provide help to students, teachers and
schools who need it;
(2) ensure quality teaching, challenging curricula, and
extended learning time; and
(3) end social promotion and take steps to turn around
failing schools.
Lessons learned from these districts will be shared with
schools across the country. Schools will be encouraged to
provide students and parents with school report cards and
expanded choices with public education.
Awards will be made according to a competitive, peer review
process. Consortia of large and small urban areas, and rural
school districts will be selected to participate.
Schools run by the Bureau of Indian Affairs are also
eligible.
Successful applicants will have broad-based partnerships to
support their reforms, including parents, teachers, local
government, business, civic groups, institutions of higher
education and other members of the community.
Mr. KENNEDY. Mr. President, President Clinton and Democrats in
Congress have made it a top priority to see that America has the best
public schools in the world--and we intend to do all we can to see that
we reach that goal.
The nation's students deserve modern schools with world-class
teachers. But too many students in too many schools in too many
communities across the country fail to achieve that standard. The
latest international survey of math and science achievement confirms
the urgent need to raise standards of performance for schools,
teachers, and students alike. It is shameful that America's twelfth
graders ranked among the lowest of the 22 nations participating in this
international survey of math and science.
The challenge is clear. We must do all we can to improve teaching and
learning for all students across the nation. That means:
We must continue to support efforts to raise academic standards.
We must test students early, so that we know where they need help in
time to make that help effective.
We must provide better training for current and new teachers, so that
they are well-prepared to teach to high standards.
We must reduce class size, to help students obtain the individual
attention they need.
We must provide after-school programs to make constructive
alternatives available to students and keep them off the streets, away
from drugs, and out of trouble.
We must provide greater resources to modernize and expand the
nation's school buildings to meet the urgent needs of schools for up-
to-date facilities.
I will do all I can to see that the ``RESULTS! Act''--``An Act to
Revitalize and Empower Schools to Upgrade
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for Long-Term Success''--is approved by Congress. The bill will help
modernize and expand the nation's schools, reduce class size, expand
after-school care, improve education technology in schools, and create
education opportunity zones in communities across the country.
A necessary foundation for a successful school is a qualified teacher
in every classroom to make sure young children receive the individual
attention they need. That's why a pillar of the Democratic agenda is to
help bring 100,000 new teachers to schools and reduce class size in the
elementary grades.
Research has shown that students attending small classes in the early
grades make more rapid progress than students in larger classes. The
benefits are greatest for low-achieving, minority, and low-income
children. Smaller classes also enable teachers to identify and work
effectively with students who have learning disabilities, and reduce
the need for special education in later grades.
Many states are also considering proposals to reduce class size--but
you can't reduce class size without the ability to hire additional
qualified teachers to fill the additional classrooms.
Too many schools are already understaffed. During the next decade,
rising student enrollments and massive teacher retirements mean that
the nation will need to hire 2 million new teachers. Between 1995 and
1997, student enrollment in Massachusetts rose by 28,000 students,
causing a shortage of 1,600 teachers--without including teacher
retirements.
The teacher shortage has forced many school districts to hire
uncertified teachers, and ask certified teachers to teach outside their
area of expertise. Each year, more than 50,000 under-prepared teachers
enter the classroom. One in four new teachers does not fully meet state
certification requirements. Twelve percent of new teachers have had no
teacher training at all. Students in inner-city schools have only a 50%
chance of being taught by a qualified science or math teacher. In
Massachusetts, 30% of teachers in high-poverty schools do not even have
a minor degree in their field.
Our proposal will reduce class size in grades K-3 to a nationwide
average of 18 by hiring more teachers. Under our proposal, states and
school districts will be able to recruit, train and hire 100,000
additional qualified teachers in order to reduce class size and improve
teaching and learning in these early grades. In the first year,
Massachusetts will receive $22 million to support these efforts. We
will also be working through the Higher Education Act to improve
teacher training at colleges and universities.
Our proposal will also help schools meet their urgent needs for
construction, modernization, and renovation. Schools across the nation
face serious problems. Many are overcrowded. Many others have
antiquated facilities suffering from physical decay, with no ability to
handle the needs of modern education. Across the country, 14 million
children in a third of the nation's schools are learning in substandard
buildings. Half the schools have at least one unsatisfactory
environmental condition.
Massachusetts is no exception. 41% of our schools across the state
report that at least one building needs extensive repair or should be
replaced. Three-quarters report serious problems in buildings, such as
plumbing or heating defects. Eighty percent have at least one
unsatisfactory environmental factor.
It is difficult enough to teach or learn in dilapidated classrooms.
But now, because of escalating enrollments, those classrooms are
increasingly overcrowded. The nation will need 6,000 new schools in the
next few years, just to maintain current class sizes.
It will take over $100 billion just to repair existing facilities.
Obviously, the federal government cannot do the whole job. But states
and communities across the country are working hard to meet these
needs, and the federal government should do more to help.
This year, Revere, Massachusetts passed a $2.2 million bond issue to
renovate the roofs on three of its seven schools. After these
renovations were completed, a fourth school's roof started to leak. The
leak is so serious that the school's new fire system is threatened.
School Committee members estimate that fixing the roof will cost an
additional $1 million, and they don't know where to get the money.
Last year, half of Worcester's schools were not equipped with the
wiring and infrastructure to handle modern technology.
Enrollment in Springfield schools has increased by over 1,500
students, or 6 percent, in the last two years, forcing teachers to hold
classes in storage rooms, large closets, and in basements.
Our proposal will authorize states and local governments to issue $22
billion in bonds for school repairs and construction. Part of the
amount will go to state governments and part will go to the 100 cities
across the nation with the largest numbers of low-income children,
including Boston and Springfield. The bonds will be interest-free for
the states and cities--Uncle Sam will pay the interest.
Our legislation also addresses the urgent need to provide effective
activities for children of all ages during the many hours each week
when they are not in school.
Each day, 5 million children, many as young as 8 or 9 years old, are
left home alone after school. Juvenile delinquent crime peaks in the
hours between 3 p.m. and 8 p.m. Children unsupervised are more likely
to be involved in anti-social activities and destructive patterns of
behavior.
Our goal in this legislation is to encourage communities to develop
activities that will engage children and keep them out of trouble.
Crime survivors, law enforcement representatives, prosecutors, and
educators have all joined together in calling for a substantial federal
investment in after-school programs.
Clearly, such financial assistance is needed in states across the
country. Too often, parents cannot afford the thousands of dollars a
year required to pay for after-school care, if it exists at all. In
Massachusetts, 4,000 eligible children are on waiting lists for after-
school care, and tens of thousands more have parents who have given up
on getting help. Nationwide, half a million eligible children are on
waiting lists for federal child care subsidies. The need for increased
opportunities is obvious and this legislation attempts to meet it.
Our bill will provide $1 billion over the next 5 years for after-
school programs, to enable public school districts in partnership with
community-based organizations to bring millions more children,
including disabled children, into such programs, and make schools into
community learning centers as well.
This proposal will help communities to increase the availability of
after-school programs. It will support efforts in Boston to make after-
school services available to as many children as possible. Boston's 2-
to-6 Initiative will serve an additional 3,000 young people over the
next four years, keep school buildings open for city programs and non-
profit programs, and challenge private sector leaders to double the
number of available after-school jobs to 1,000 over the next two years.
The proposed expansion of the 21st Century Community Learning Center
program will enable schools and communities to create programs that
meet their after-school needs--and obtain the extra resources required
to make it happen.
Our bill also proposes to help failing schools implement the reforms
that they know will turn them around. Too many schools now struggle
with watered-down curricula, low expectations, fewer qualified
teachers, and fewer resources than other schools.
Under the Education Opportunity Zones proposal, these school
districts will get the extra resources they need in order to increase
achievement, raise standards, end social promotion, upgrade teacher
skills, and strengthen ties between the schools, the parents, and the
community as a whole.
The bill also calls for continued investment in education technology,
so that cutting-edge technology will be available to as many students
as possible. That means we must continue to invest more in computers,
software, and high-tech training for teachers, so that every child has
the opportunity to use technology as an effective learning tool.
Investing in students and teachers and schools is one of the best
investments America can make. For schools
[[Page S1347]]
across America, help can't come a minute too soon, and I urge Congress
to enact this legislation as expeditiously as possible. The message to
schools across the country today is clear--help is finally on the way.
Ms. MOSELEY-BRAUN. Mr. President, I want to commend the Democratic
leader, Senator Daschle, for assembling this important legislation, and
I want to thank President Clinton for articulating a vision for America
that includes a significant federal commitment toward improving the
quality and accessibility of education for all Americans. The RESULTS
Act is designed to help fulfill that commitment, and represents the
type of action this Congress should take to prepare America for the
21st century.
I visited a number of schools in Illinois over the past several
months, and talked with parents, teachers, children, and school
officials at the elementary, secondary, and postsecondary levels. I
found that without exception, education is at the top of their minds.
Illinoisans, like most Americans, support policies designed to help
ensure that America remains preeminent in the intensely competitive,
global economy of the 21st century.
Last year, this Congress took historic measures to improve the
accessibility of quality higher education, with the enactment of
President Clinton's HOPE Scholarship and Lifetime Learning tax credits.
We also restored the student loan interest deduction, so that graduates
now receive a Federal income tax deduction when they make interest
payments on their student loans. I intend to work this year to broaden
the deduction we created last year, so that more former students,
struggling under a burden of debt that has grown enormously in recent
years, can make ends meet.
Now, this Congress must act to improve the quality of elementary and
secondary education available to our children. We must act to ensure
that as we approach the 21st century, no child is left behind. We must
act to ensure that no child is forced to try to learn in an overcrowded
classroom or a crumbling school, and that every child has access to the
kinds of technologies he or she will need to understand to compete in
the next millennium.
The RESULTS Act will help States and school districts improve their
schools for the 21st century, and includes a number of very important
provisions, including a plan to create a new partnership between the
Federal government and State and local governments to rebuild and
modernize our school buildings. Under this new proposal, States and
school districts would be able to issue new, zero-interest bonds to
modernize and build schools. Bondholders would receive Federal income
tax credits in lieu of interest payments. Using this mechanism, the
Federal government can leverage almost $22 billion worth of school
improvements, at a cost of only $3.3 billion over the next five years,
according to the Joint Committee on Taxation.
According to the U.S. General Accounting Office, it will cost $112
billion to bring existing school buildings up to code--to patch the
leaky roofs, replace the broken windows, fix the plumbing, and make
other needed repairs. That price tag, as enormous as it sounds, does
not include the cost of building new schools to accommodate the record
numbers of children who are crowding our schools, nor the cost of
upgrading classrooms for modern computers.
This problem has overwhelmed the fiscal capacities of state and local
authorities. It is a problem affecting all areas of the country,
because it is a direct result of the antiquated way we pay for public
education in this country. The local property tax, which made sense as
a funding mechanism when wealth was accumulated in the form of land, no
longer works as a means of funding major capital investments. In urban,
rural, and suburban schools all across the country, the magnitude of
the crumbling schools problem has dwarfed local financing capabilities.
It is a problem that directly affects the ability of students to learn,
teachers to teach, and schools to implement the kinds of educational
reform efforts that parents are demanding to improve the quality of
education in this country.
According to academic data correlating building conditions and
student achievement, children in these decrepit classrooms have less of
a chance. Their education is at risk. They will be less able to compete
in the 21st century job market. Ultimately, we will all come out on the
losing end. America can't compete if its students can't learn, and our
students can't learn if their schools are falling down.
The legislation being introduced today gives Congress a historic
opportunity to jump start the process of rebuilding, renovating,
modernizing, and constructing new schools to meet the needs of all our
children into the 21st century. The RESULTS Act engages the federal
government in the support of elementary and secondary education in a
way that preserves local control of education. In the same way the
federal government helps finance highways, but the state and local
governments decide where the roads go, the federal government can help
state and local authorities rebuild our schools. America has a $112
billion infrastructure problem that makes it increasingly difficult for
our students to learn the skills they will need to keep America
competitive in the 21st century. Now is the time for Congress to act.
I want to congratulate the Democratic leader again for his work on
this bill, as well as President Clinton and Secretary Riley, who helped
shape many of its provisions. I hope the 105th Congress will approve
this legislation quickly, and renew the promise embodied in the words
of the 19th century American poet James Russell Lowell, who wrote: ``.
. . [I]t was in making education not only common to all, but in some
sense compulsory on all, that the destiny of the free republics of
America was practically settled.''
______
By Mr. SPECTER:
S. 1709. A bill to authorize the Secretary of Labor to provide
assistance to States for the implementation of enhanced pre-vocational
training programs, in order to improve the likelihood of enabling
welfare recipients to make transitions from public assistance to
employment, and for other purposes; to the Committee on Labor and Human
Resources.
the job preparation and retention training act of 1998
Mr. SPECTER. Mr. President, I have sought recognition to introduce
vocational training legislation, entitled the ``Job Preparation and
Retention Training Act of 1998,'' which is designed to respond to the
need for pre-vocational training assistance to enable welfare
recipients to make the transition from public assistance to work.
I believe that the historic 1996 welfare reform law will serve the
American people well by ending systemic dependence and creating a
program that emphasizes employment--gainful and permanent employment--
by giving the States greater flexibility in administering their
programs. We are already hearing about the rise in employment rates and
the substantial drops in State welfare rolls.
While many Americans have effectively made the transition from
welfare to work, a need exists for skills training to enable many of
the individuals who have been long-term welfare recipients to make
transitions into unsubsidized employment that provides career potential
and enables the individuals to achieve economic self-sufficiency.
Mr. President, as Chairman of the Senate Labor, Health and Human
Services and Education Appropriations Subcommittee, I believe that it
would be worthwhile to recognize the need for pre-vocational training,
a type of training that is not formally offered by the U.S. Department
of Labor.
Current Federal law does not adequately address the tremendously
negative effect of unfavorable environmental and cultural factors on
the ability of such individuals to obtain and retain gainful
employment.
I believe that a Federal commitment to the development of pre-
vocational training programs should focus on: improving the job
readiness of individuals who are welfare recipients and preparing the
individual psychologically and attitudinally for employment.
The bill I am introducing today would authorize funding for States to
enroll chronic welfare dependents into a training program which would
provide the necessary skills to locate and maintain employment. The
Secretary of Labor would award States grants on
[[Page S1348]]
a competitive basis for use in teaching individuals to fulfill
workplace responsibilities such as punctuality, literacy,
communication, and other survival skills. Once an adult has completed
this short period of training, he or she would be prepared to get the
most out of their job training and unsubsidized employment
opportunities. The $50 million authorization would be provided for each
of the next two years. The sunset will provide a chance to determine
the program's efficacy. Further, training funds would be limited to no
more than $1,200 per individual, which I am advised is a realistic cost
of skills training and job placement programs.
Many community-based organizations across the country have already
recognized this need and are providing pre-vocational training. In this
limited context, we have found that prevocational trainees have fared
much better in the economy. I am advised that one such community-based
organization, the Opportunities Industrialization Centers of America,
Inc., has found that the average hourly wage of trainees prior to pre-
vocational training was $3.70, not even a minimum wage. After receiving
pre-vocational training, these same participants started earning an
average of $8.00 an hour. Further, pre-vocational training resulted in
an 85% placement rate into better-paying jobs.
I encourage my colleagues to join me in sponsoring this legislation.
This bill is intended to enhance welfare reform and it does not tamper
with the positive changes in existing law, such as the five-year time
limit. Simply, I am asking for continued federal involvement in ending
generational welfare.
______
By Mr. COCHRAN (for himself, Mr. Levin, Mr. Leahy, Mr. Stevens,
Mr. Robb, Mr. Warner, Mr. Sarbanes, and Ms. Mikulski) (by
request):
S. 1710. A bill to provide for the correction of retirement coverage
errors under chapters 83 and 84 of title 5, United States Code; to the
Committee on Governmental Affairs.
the retirement coverage error correction act of 1998
Mr. COCHRAN. Mr. President, today I am introducing, at the request of
the Administration, a bill to provide for the correction of retirement
coverage errors under chapters 83 and 84 of title 5, United States
Code--specifically, current and former federal employees who should
have been placed in the Federal Employee Retirement System (FERS), but
were misclassified as Civil Service Retirement System (CSRS) or CSRS
Offset.
The federal government's transition from CSRS to FERS began in 1984.
As government agencies carried out the complex job of applying two sets
of transition rules, mistakes were made, and thousands of employees
were placed in the wrong retirement system--many learning that their
pensions would be less than expected. The Administration's proposal,
``The Federal Retirement Coverage Corrections Act,'' would provide
employees with a choice between corrected retirement coverage and the
coverage the employee expected to receive, without disturbing Social
Security coverage law.
I think this bill deserves the careful consideration of the Senate.
As Chairman of the Governmental Affairs Subcommittee with jurisdiction
over the subject, I will try to ensure a thorough review of all the
options for dealing with this issue.
Among the provisions of the bill, are the following:
(1) Generally, errors of less than 3 years would not be eligible for
corrective action.
(2) Social Security-covered employees who were erroneously CSRS
covered or CSRS Offset covered, may elect to be retroactively under
either CSRS Offset or Social Security-only coverage.
(3) CSRS covered, CSRS Offset covered or Social Security-only covered
employees who were erroneously FERS covered will be deemed to have
elected FERS coverage and will remain covered by FERS, unless the
employee declines it.
(3) Generally, FERS covered employees, former employees, and
annuitants who were erroneously CSRS covered or CSRS Offset covered,
may elect retroactive coverage under either CSRS Offset or FERS
coverage. However, this election may not be available or may be subject
to adjustment under certain very limited circumstances.
(5) A Thrift Plan make-whole provision to provide the earnings that
are now disallowed on the employee's make-up contributions.
(6) Provisions are included to deal with the retroactive application
of Social Security upon the correction of a retirement coverage error
in which an employee was erroneously covered by CSRS.
(7) The Director of OPM is given discretionary authority to waive
time limits, reimburse necessary and reasonable expenses and compensate
losses, and waive specified repayments; and finally
(8) Costs of the ``Retirement Coverage Error Correction Act'' would
be paid from the Civil Service Retirement Fund, and OPM would be
authorized to spend money from that Fund to administer the Act.
I invite Senators to join in this effort to address a serious problem
affecting many federal employees.
I ask unanimous consent that a copy of the bill and a section by
section analysis be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1710
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Retirement Coverage Error
Correction Act of 1998''.
SEC. 2. FINDINGS AND PURPOSE.
The Congress finds that a number of Government employees
have been placed under erroneous retirement coverage during
the transition from the Civil Service Retirement System to
the Federal Employees Retirement System. When these errors
are of significant duration, they adversely affect an
employee's ability to plan for retirement. It is the purpose
of this Act to provide a remedy that treats all such
individuals fairly and reasonably, and demonstrates the
Government's concern for its employees who have been
disadvantaged by a Government error in their retirement
coverage. Affected employees should have a choice between
corrected retirement coverage and the benefit the employee
would have received under the erroneous coverage, without
disturbing Social Security coverage law.
SEC. 3. DEFINITIONS.
For the purposes of this Act--
(1) ``Annuitant'' means an individual described by section
8331(9) or 8401(2) of title 5, United States Code;
(2) ``CSRS'' means the Civil Service Retirement System
established under subchapter III of chapter 83 of title 5,
United States Code;
(3) ``CSRS covered'' means subject to the provisions of
subchapter III of chapter 83 of title 5, United States Code,
including full CSRS employee deductions;
(4) ``CSRS Offset covered'' means subject to the provisions
of subchapter III of chapter 83 of title 5, United States
Code, including reduced CSRS employee deductions;
(5) ``Director'' means the Director of Office of Personnel
Management;
(6) ``FERS'' means the Federal Employees Retirement System
established under chapter 84 of title 5, United States Code;
(7) ``FERS covered'' means subject to the provisions of
chapter 84 of title 5, United States Code;
(8) ``OASDI employee tax'' means the Old Age, Survivors and
Disability Insurance tax imposed on wages under section
3101(a) of the Internal Revenue Code of 1986;
(9) ``OASDI employer tax'' means the Old Age, Survivors and
Disability Insurance tax imposed on wages under section
3111(a) of the Internal Revenue Code of 1986;
(10) ``OASDI taxes'' means the sum of the OASDI employee
tax and OASDI employer tax;
(11) ``former employee'' means an individual who formerly
was a Government employee, but who is not an annuitant;
(12) ``Office'' means the Office of Personnel Management;
(13) ``Retirement coverage determination'' means the
determination by an agency whether employment is CSRS
covered, CSRS Offset covered, FERS covered, or Social
Security only covered;
(14) ``Retirement coverage error'' means an erroneous
retirement coverage determination that was in effect for a
minimum period of 3 years of service after December 31, 1986;
(15) ``Service'' means a period of civilian service that is
creditable under section 8332 or 8411 of title 5, United
States Code;
(16) ``Social Security-only covered'' means employment
under section 3121(b) of the Internal Revenue Code of 1986,
subject to OASDI taxes, but not CSRS covered, CSRS Offset
covered, or FERS covered; and
(17) ``Survivor'' means an individual described by section
8331(10) or 8401(28) of title 5, United States Code.
SEC. 4. ERRORS OF LESS THAN 3 YEARS EXCLUDED.
Except as otherwise provided in this Act, an erroneous
retirement coverage determination that was in effect for a
period of less than 3 years of service after December 31,
1986, is not covered by this Act.
[[Page S1349]]
SEC. 5. SOCIAL SECURITY-ONLY COVERED EMPLOYEES WHO WERE
ERRONEOUSLY CSRS COVERED OR CSRS OFFSET
COVERED.
(a) This section applies in the case of a retirement
coverage error in which a Social Security-only covered
employee was erroneously CSRS covered or CSRS Offset covered.
(b)(1) This subsection applies if the retirement coverage
error has not been corrected prior to the effective date of
the regulations described in paragraph (3).
(2) In the case of an individual who is erroneously CSRS
covered, as soon as practicable after discovery of the error,
and subject to the right of an election under paragraph (3),
such a individual shall be CSRS Offset covered, retroactive
to the date of the retirement coverage error.
(3) Upon written notice of a retirement coverage error, an
individual shall have 6 months to make an election, under
regulations promulgated by the Office, to be CSRS Offset
covered or Social Security-only covered, retroactive to the
date of the retirement coverage error. If the individual does
not make an election prior to the deadline, the individual
shall remain CSRS Offset covered.
(c)(1) This subsection applies if the retirement coverage
error was corrected prior to the effective date of the
regulations described in subsection (b)(3).
(2) Within 6 months after the date of enactment of this
Act, the Office shall promulgate regulations authorizing
individuals to elect, during the 18-month period immediately
following the effective date of the regulations, to be CSRS
Offset covered or Social Security-only covered, retroactive
to the date of the retirement coverage error.
(3) If an eligible individual does not make an election
under paragraph (2) prior to the deadline, the corrective
action previously taken shall remain in effect.
SEC. 6. SOCIAL SECURITY-ONLY COVERED EMPLOYEES NOT ELIGIBLE
TO ELECT FERS WHO WERE ERRONEOUSLY FERS
COVERED.
(a) This section applies in the case of a retirement
coverage error in which a Social Security-only covered
employee not eligible to elect FERS coverage under authority
of section 8402(c) of title 5, United States Code, was
erroneously FERS covered.
(b)(1) This subsection applies if the retirement coverage
error has not been corrected prior to the effective date of
the regulations described in paragraph (2).
(2) Upon written notice of a retirement coverage error, an
individual shall have 6 months to make an election, under
regulations promulgated by the Office, to be FERS covered or
Social Security-only covered, retroactive to the date of the
retirement coverage error. If the individual does not make an
election prior to the deadline, the individual shall remain
FERS covered, retroactive to the date of the retirement
coverage error.
(c)(1) This subsection applies if the retirement coverage
error was corrected prior to the effective date of the
regulations described in subsection (b)(2).
(2) Within 6 months after the date of enactment of this
Act, the Office shall promulgate regulations authorizing
individuals to elect, during the 18-month period immediately
following the effective date of the regulations to be FERS
covered or Social Security-only covered, retroactive to the
date of the retirement coverage error.
(3) If an eligible individual does not make an election
under paragraph (2) prior to the deadline, the corrective
action previously taken shall remain in effect.
SEC. 7. CSRS COVERED, CSRS OFFSET COVERED, AND FERS-ELIGIBLE
SOCIAL SECURITY-ONLY COVERED EMPLOYEES WHO WERE
ERRONEOUSLY FERS COVERED WITHOUT AN ELECTION.
(a) If an individual was prevented from electing FERS
because the individual was erroneously FERS covered during
the period when the individual was eligible to elect FERS
under title III of the Federal Employees Retirement System
Act of 1986, the individual is deemed to have elected FERS
coverage and will remain covered by FERS, unless the
individual declines, under regulations promulgated by the
Office, to be FERS covered, in which case the individual will
be CSRS covered, CSRS Offset covered, or Social Security-only
covered; as would apply in the absence of a FERS election,
retroactive to the date of the erroneous retirement coverage
determination.
(b) In the case of an individual to whom subsection (a)
applies, who dies prior to discovery of the coverage error,
or who dies during the election period prescribed in
subsection (a) prior to making an election to correct the
error, without having the right to decline FERS coverage, the
individual's survivors shall have the right to make the
election under regulations promulgated by the Office that
provide for such election in a manner consistent with the
election rights of the individual.
(c) This section shall be effective retroactive to January
1, 1987, except that this section shall not affect
individuals who made or were deemed to have made elections
similar to those provided in this section under regulations
promulgated by the Office prior to the effective date of this
Act.
SEC. 8. FERS COVERED CURRENT AND FORMER EMPLOYEES WHO WERE
ERRONEOUSLY CSRS COVERED OR CSRS OFFSET
COVERED.
(a) This section applies to a FERS covered employee or
former employee who was erroneously CSRS covered or CSRS
Offset covered as a result of a retirement coverage error.
(b)(1) This subsection applies if the retirement coverage
error has not been corrected prior to the effective date of
the regulations described in paragraph (2). As soon as
practicable after discovery of the error, and subject to the
right of an election under paragraph (2), if CSRS covered or
CSRS Offset covered, such individual shall be treated as CSRS
Offset covered, retroactive to the date of the retirement
coverage error.
(2) Upon written notice of a retirement coverage error, an
individual shall have 6 months to make an election, under
regulations promulgated by the Office, to be CSRS Offset
covered or FERS covered, retroactive to the date of the
retirement coverage error. If the individual does not make an
election by the deadline, a CSRS Offset covered individual
shall remain CSRS Offset covered and a CSRS covered
individual shall be treated as CSRS Offset covered.
(c)(1) This subsection applies if the retirement coverage
error was corrected prior to the effective date of the
regulations described in subsection (b)(2).
(2)(A) Within 6 months after the date of enactment of this
Act, the Office shall promulgate regulations authorizing
individuals to elect, during the 18-month period immediately
following the effective date of the regulations, to be CSRS
Offset covered, retroactive to the date of the retirement
coverage error.
(B) An individual who previously received a payment ordered
by a Court or provided as a settlement of claim for losses
resulting from a retirement coverage error shall not be
entitled to make an election under this subsection unless
that amount is waived in whole or in part under section 12,
and any amount not waived is repaid.
(C) An individual who, subsequent to correction of the
retirement coverage error, received a refund of retirement
deductions under section 8424, or a distribution under
section 8433, of title 5, United States Code, shall not be
entitled to make an election under this subsection.
(3) If an individual is ineligible to make an election or
does not make an election under paragraph (2) prior to the
deadline, the corrective action previously taken shall remain
in effect.
SEC. 9. ANNUITANTS AND SURVIVORS IN CASES WHERE FERS COVERED
EMPLOYEES WERE ERRONEOUSLY CSRS COVERED OR CSRS
OFFSET COVERED.
(a) This section applies to an individual who is an
annuitant or a survivor of a FERS covered employee who was
erroneously CSRS covered or CSRS Offset covered as a result
of a retirement coverage error.
(b)(1) Within 6 months after the date of enactment of this
Act, the Office shall promulgate regulations authorizing an
individual described in subsection (a) to elect CSRS Offset
coverage or FERS coverage, retroactive to the date of the
retirement coverage error.
(2) An election under this subsection shall be made within
18 months after the effective date of the regulations.
(3) If the individual elects CSRS Offset coverage, the
amount in the employee's Thrift Savings Plan account under
subchapter III of chapter 84 of title 5, United States Code,
at the time of retirement that represents the Government's
contributions and earnings on those contributions (whether or
not this amount was subsequently distributed from the Thrift
Savings Plan) will form the basis for a reduction in the
individual's annuity, under regulations promulgated by the
Office. The reduced annuity to which the individual is
entitled shall be equal to an amount which, when taken
together with the amount referred to in the preceding
sentence, would result in the present value of the total
being actuarially equivalent to the present value of an
unreduced CSRS Offset annuity that would have been provided
the individual.
(4) If--
(A) a surviving spouse elects CSRS Offset benefits; and
(B) a FERS basic employee death benefit under section
8442(b) of title 5, United States Code, was previously paid;
then the survivor's CSRS Offset benefit shall be subject to a
reduction, under regulations promulgated by the Office. The
reduced annuity to which the individual is entitled shall be
equal to an amount which, when taken together with the amount
of the payment referred to subparagraph (B) would result in
the present value of the total being actuarially equivalent
to the present value of an unreduced CSRS Offset annuity that
would have been provided the individual.
(5) An individual who previously received a payment ordered
by a Court or provided as a settlement of claim for losses
resulting from a retirement coverage error shall not be
entitled to make an election under this subsection unless
repayment of that amount is waived in whole or in part under
section 12, and any amount not waived is repaid.
(c) If the individual does not make an election under
subsection (b) prior to the deadline, the retirement coverage
shall be subject to the following rules--
(1) If corrective action was previously taken, that
corrective action shall remain in effect; and
(2) If corrective action was not previously taken, the
employee shall be CSRS Offset covered, retroactive to the
date of the retirement coverage error.
[[Page S1350]]
SEC. 10. PROVISIONS RELATED TO SOCIAL SECURITY COVERAGE OF
MISCLASSIFIED EMPLOYEES.
(a) Reports to Commissioner of Social Security.--In order
to carry out the Commissioner of Social Security's
responsibilities under title II of the Social Security Act,
the Commissioner may request the head of each agency that
employs or employed an individual erroneously subject to CSRS
coverage as a result of a retirement coverage error and
retroactively converted to CSRS Offset coverage, FERS
coverage, or Social Security-only coverage to report in
coordination with the Office of Personnel Management, and in
such form and within such time frame as the Commissioner may
specify, any or all of the following--
(1) the total wages (as defined in section 3121(a) of the
Internal Revenue Code of 1986) paid to such individual during
each year of the entire period of the erroneous CSRS
coverage;
(2) the excess CSRS deduction amount for the individual;
and
(3) such additional information as the Commissioner may
require for the purpose of carrying out the Commissioner's
responsibilities under title II of the Social Security Act.
The head of an agency or the Office shall comply with such a
request from the Commissioner. For purposes of section 201 of
the Social Security Act, wages reported pursuant to this
subsection shall be deemed to be wages reported to the
Secretary of the Treasury or the Secretary's delegates
pursuant to subtitle F of the Internal Revenue Code of 1954.
For purposes of this section, the ``excess CSRS deduction
amount'' for an individual shall be an amount equal to the
difference between the CSRS deductions withheld and the CSRS
Offset or FERS deductions, if any, due with respect to the
individual during the entire period the individual was
erroneously subject to CSRS coverage as a result of a
retirement coverage error.
(b) Adjustment to Transfers under Section 201 of the Social
Security Act.--Any amount transferred from the General Fund
to the Federal Old-Age and Survivors Insurance Trust Fund and
the Federal Disability Insurance Trust Fund under section 201
of the Social Security Act on the basis of reports under this
section shall be adjusted by amounts previously transferred
as a result of corrections made (including corrections made
before the date of enactment of this Act), and shall be
reduced by any excess CSRS deduction amounts determined by
the Director of the Office of Personnel Management to be
remaining to the credit of individuals in the Civil Service
Retirement and Disability Fund or in accounts maintained by
the employing agencies. Such amounts determined by the
Director in the preceding sentence shall be transferred to
the Federal Old Age and Survivors Insurance Trust Fund and
the Federal Disability Insurance Trust Fund in the
proportions indicated in sections 201 (a) and (b) of the
Social Security Act.
(c) Application of OASDI Tax Provisions of the Internal
Revenue Code of 1986 to Affected Individuals and Employing
Agencies.--An individual described in subsection (a) and the
individual's employing agency shall be deemed to have fully
satisfied in a timely manner their responsibilities with
respect to the taxes imposed by sections 3101(a), 3102(a),
and 3111(a) of the Internal Revenue Code of 1986 on the wages
paid by the employing agency to such individual during the
entire period he or she was erroneously subject to CSRS
coverage as a result of a retirement coverage error. No
credit or refund of taxes on such wages shall be allowed as
result of the operation of this subsection.
SEC. 11. FUTURE CSRS COVERAGE DETERMINATIONS.
No agency shall place an individual under CSRS coverage
unless--
(1) the individual has been employed with CSRS coverage
within the preceding 365 days; or
(2) the Office has agreed in writing that the agency's
coverage determination is correct.
SEC. 12. DISCRETIONARY ACTIONS BY DIRECTOR.
(a) The Director is authorized to take any of the following
actions--
(1) extend the deadlines for making elections under this
Act in circumstances involving an individual's inability to
make a timely election due to cause beyond the individual's
control;
(2) provide for the reimbursement of necessary and
reasonable expenses incurred by an individual with respect to
settlement of a claim for losses resulting from a retirement
coverage error, including attorney's fees, court costs, and
other actual expenses;
(3) compensate an individual for monetary losses that are a
direct and proximate result of a retirement coverage error,
excluding claimed losses relating to forgone contributions
and earnings under the Thrift Savings Plan under subchapter
III of chapter 84 of title 5, United States Code, and all
other investment opportunities; and
(4) waive repayments otherwise required under this Act.
(b) In exercising the authority under this section, the
Director shall, to the extent practicable, provide for
similar actions in situations involving similar
circumstances.
(c) Actions taken under this section are final and
conclusive, and are not subject to administrative or judicial
review on any basis.
(d) The Office of Personnel Management shall prescribe
regulations regarding the process and criteria used in
exercising the authority under this section.
(e) The Office of Personnel Management shall, within six
months after the date of enactment of this Act, and annually
thereafter for each year in which the authority provided in
this section is used, submit a report to each House of
Congress on the operation of this section.
SEC. 13. THRIFT PLAN TREATMENT FOR CERTAIN INDIVIDUALS.
(a) This section applies to an individual who--
(1) is eligible to make an election of coverage under
section 8 or section 9, and only if FERS coverage is elected
(or remains in effect) for the employee involved; or
(2) is an employee (or former employee, annuitant, or
survivor, subject to conditions similar to those in section 8
and 9) in the case of a retirement coverage error in which a
FERS covered employee was erroneously Social Security-only
covered and is corrected to FERS coverage.
(b)(1) With respect to an individual who whom this section
applies, the Director shall pay to the Thrift Savings Fund
under subchapter III of chapter 84 of title 5, United States
Code, for credit to the account of the employee involved, an
amount equal to the earnings which are disallowed under
section 8432a of such title 5 on the employee's retroactive
contributions to such Fund. Such amount shall represent
earnings, on such retroactive contributions, during the
period of the retirement coverage error and continuing up to
the date on which the amount is paid by the Director (and
based on distributions from the employee's Thrift Savings
Plan account). Such earnings shall be computed in accordance
with the procedures for computing lost earnings under such
section 8432a. The amount paid by the Director shall be
treated for all purposes as if that amount had actually been
earned on the basis of the employee's contributions.
(2) In cases in which the retirement coverage error was
corrected prior to the effective date of the regulations
under section 8(c) or section 9(b), the employee involved
(including an employee described in subsection (a)(2)) shall
have an additional opportunity to make retroactive
contributions for the period of the retirement coverage error
(subject to applicable limits), and such contributions shall
be treated in accordance with the provisions of paragraph
(1).
(c) The Office, in consultation with the Federal Retirement
Thrift Investment Board, shall prescribe regulations
appropriate to carry out this section.
SEC. 14. AUTHORIZATION AND APPROPRIATION.
All payments permitted or required by this Act to be paid
from the Civil Service Retirement and Disability Fund,
together with administrative expenses incurred by the Office
in administering this Act, shall be deemed to have been
authorized to be paid from that Fund, which is appropriated
for the payment thereof.
SEC. 15. SERVICE CREDIT DEPOSITS.
(a) In the case of a retirement coverage error in which--
(1) a FERS covered employee was erroneously CSRS covered or
CSRS Offset covered;
(2) the employee made a service credit deposit under the
CSRS rules; and
(3) there is a subsequent retroactive change to FERS
coverage;
the excess of the amount of the CSRS civilian or military
service credit deposit over the FERS civilian or military
service credit deposit, together with interest computed in
accordance with paragraphs (2) and (3) of section 8334(e) of
title 5, United States Code and regulations prescribed by the
Office, shall be a paid to the annuitant or, in the case of a
deceased employee, to the individual entitled to lump-sum
benefits under section 8342(c) or 8424(d) of title 5, United
States Code, as applicable.
(b)(1) This subsection applies in the case of an erroneous
retirement coverage determination in which--
(A) the employee made a service credit deposit under the
FERS rules; and
(B) there is a subsequent retroactive change to CSRS or
CSRS Offset coverage.
(2) If at the time of commencement of an annuity there is
remaining unpaid any excess of the CSRS civilian or military
service credit deposit over the FERS civilian or military
service credit deposit, the annuity shall be reduced based
upon the amount unpaid together with interest computed in
accordance with paragraphs (2) and (3) of section 8334(e) of
title 5, United States Code and regulations prescribed by the
Office. The reduced annuity to which the individual is
entitled shall be equal to an amount that, when taken
together with the amount referred to in the preceding
sentence, would result in the present value of the total
being actuarially equivalent to the present value of an
unreduced CSRS Offset annuity that would have been provided
the individual.
(3) If at the time of commencement of a survivor annuity,
there is remaining unpaid any excess of the CSRS service
credit deposit over the FERS service credit deposit, and
there has been no actuarial reduction in an annuity under the
preceding paragraph, the survivor annuity shall be reduced
based upon the amount unpaid together with interest computed
in accordance with paragraphs (2) and (3) of section 8334(e)
of title 5, United States Code and regulations prescribed by
the Office. The reduced survivor annuity to which the
individual is entitled shall be equal to an amount that, when
taken together with the amount referred to in the
[[Page S1351]]
preceding sentence, would result in the present value of the
total being actuarially equivalent to the present value of an
unreduced CSRS Offset survivor annuity that would have been
provided the individual.
SEC. 16. REGULATIONS.
(a) In addition to the regulations specifically authorized
in this Act, the Office may prescribe such other regulations
as are necessary for the administration of this Act.
(b) The regulations issued under this Act shall provide for
protection of the rights of a former spouse with entitlement
to an apportionment of benefits or to survivor benefits based
on the service of the employee.
SEC. 17. EFFECTIVE DATE.
Except as otherwise provided herein, this Act shall be
effective on the date of enactment.
____
Retirement Coverage Error Correction Act of 1998--Section-by-Section
Analysis
The first section provides a title for the bill, the
``Retirement Coverage Error Correction Act of 1998''.
Section 2 explains the Congressional findings and purpose
of the Act.
Section 3 defines the terms used in the Act. Among the
definitions, ``retirement coverage error'' means erroneous
coverage that was in effect for at least 3 years of service
after December 31, 1986.
Section 4 provides that, except as otherwise provided in
this Act, errors of less than 3 years are excluded from
eligibility for corrective action under the Act. The primary
exception to the three-year rule is in Section 7, concerning
FERS covered employees who should have been, but were not,
given the opportunity to elect whether to be covered by FERS.
Section 5 deals with cases of retirement coverage errors in
which a Social Security-only covered employee was erroneously
CSRS covered or CSRS Offset covered. Under this provision,
OPM will promulgate regulations giving such individuals the
option to elect to be retroactively under either CSRS Offset
or Social Security-only coverage. If erroneously under CSRS
coverage, the employee will be placed under interim CSRS
Offset coverage as soon as practicable, and will have the
right to make the coverage election under the regulations.
There will be an 18-month election period applicable to
cases where there was a correction of the coverage error
prior to the effective date of the regulations. In such
cases, if the individual does not make a timely election,
then the corrective action previously taken shall remain in
effect.
In cases where the coverage error was not corrected prior
to the effective date of the regulations (other than interim
conversion from CSRS to CSRS Offset), the individual will
have 6 months after notification of the error in which to
make an election. In such cases, if the individual does not
make a timely election, then the individual will remain under
CSRS Offset.
Section 6 deals with cases of retirement coverage errors in
which a Social Security-only covered employee who was not
entitled to elect FERS was erroneously FERS covered. Under
this provision, OPM will promulgate regulations giving such
individuals the option to elect to be retroactively under
either FERS coverage or Social Security-only coverage.
There will be an 18-month election period applicable to
cases where there was a correction of the coverage error
prior to the effective date of the regulations. In such
cases, if the individual does not make a timely election,
then the corrective action previously taken shall remain in
effect.
In cases where the coverage error was not corrected prior
to the regulations, the individual will have 6 months after
notification of the error in which to make an election. In
such cases, if the individual does not make a timely
election, then the individual will remain under FERS
coverage.
Section 7 provides that in the case of an erroneous
retirement coverage determination in which a CSRS covered,
CSRS Offset covered or FERS-eligible Social Security-only
covered employee was erroneously FERS covered, the employee
is deemed to have elected FERS coverage and will remain
covered by FERS, unless the employee declines, under
regulations promulgated by OPM, to be FERS covered. This form
of corrective action is appropriate, regardless of whether
the error lasted 3 years, when the individual was prevented
from electing FERS during the statutory election period
provided by title III of the FERS Act of 1986. Individuals
who previously had the right to make such an election under
OPM regulations will not be given an additional opportunity
to make an election. This section ratifies OPM's authority to
issue regulatory provisions to provide appropriate treatment
in this situation, in accordance with court decisions. This
section will be effective retroactive to January 1, 1987.
Section 8 applies to employees and former employees (but
not annuitants) in cases in which a FERS covered employee was
erroneously CSRS covered or CSRS Offset covered. Under this
provision, OPM will promulgate regulations giving such
individuals the option to elect to be retroactively under
either CSRS Offset or FERS coverage. CSRS covered employees
will be immediately and retroactively converted to CSRS
Offset coverage, since Social Security coverage is automatic
by action of law, with the right to make the coverage
election under the regulations.
There will be an 18-month election period applicable to
cases where there was a correction of the coverage error
prior to the effective date of the regulations. In such
cases, if the individual does not make a timely election,
then the corrective action previously taken shall remain in
effect.
In cases where the coverage error has not been corrected
prior to the effective date of the regulations (other than
interim conversion from CSRS to CSRS Offset), the individual
will have 6 months after notification of the error in which
to make an election. In such cases, if the individual does
not make a timely election, then the individual will remain
under CSRS Offset.
In two situation, individuals will not be permitted to make
an election. When an individual elects to receive a refund of
FERS employee contributions or a Thrift Savings Plan payout,
the individual waives the right to benefits based on the
service. Accordingly, if, subsequent to correction of the
error and placement under FERS, the individual takes either
of those actions, there is no justification to reinstate the
rights to retirement benefits which were given up knowingly
and voluntarily.
In addition, individuals who previously received a payment
ordered by a Court or provided as a settlement of claim for
losses resulting from a retirement coverage error will not be
entitled to make an election unless repayment is made, or is
waived by the Director of OPM.
Section 9 deals with the same types of errors as section 8,
but in cases where the employee has retired or died. The
basic provisions are essentially the same, but there are
provisions for actuarial adjustments to prospective annuity
payments when a retroactive election divests the right to
payments which have already been made.
Section 10 deals with the retroactive application of Social
Security upon the correction of a retirement coverage error
in which an employee was erroneously covered by CSRS.
Subsection (a) provides discretionary authority for the
Commissioner of Social Security to request wage and other
relevant information directly from the employing agencies, in
a form and manner prescribed by the Commissioner. Such
information is necessary to correctly compute the employee's
Social Security benefit as if the employee had not been
erroneously classified. Exercise of this authority would
provide for a more efficient provision of such information
than current law and procedures, particularly for years
prior to the 3-year limitation on assessment of taxes.
Information for years prior to the 3-year period open to
assessment of taxes would otherwise have to be provided by
each individual employee or be provided at the discretion
of the employing agency. The authority contained in this
subsection would enable the Commissioner of Social
Security to prescribe specific procedures, if those
procedures are determined to be necessary, to receive
directly the information for these employees to ensure
that their wage records properly reflect their earnings
history.
Subsection (b) provides that any amounts which may be
transferred to the Social Security Trust Funds as a result of
the reports which may be required under subsection (a) shall
be reduced by certain amounts previously and erroneously
deducted for CSRS, and that these amounts shall be
transferred from the Civil Service Retirement and Disability
Fund to the Social Security Trust Funds in order to correct
the retirement and Social Security coverage error. Subsection
(c) provides that the OASDI employee tax and OASDI employer
tax are deemed to have been paid for the entire period of the
erroneous CSRS coverage.
Section 11 requires agencies, before placing any employee
in CSRS coverage, to obtain written agreement from OPM that
CSRS coverage is correct, unless the individual has been
employed with CSRS coverage within the preceding 365 days,
the generally applicable statutory period for exclusion from
Social Security. It is intended to prevent future coverage
errors.
Section 12 gives the Director of OPM specific discretionary
authority to waive time limits, reimburse necessary and
reasonable expenses and compensate losses, and waive
specified repayments. The authority to compensate an
individual for losses does not extend to claims relating to
forgone Thrift Savings Plan contributions and earnings or
other investment opportunities. In view of the judgmental
nature of such relief, the provision bars administrative or
judicial review of these actions. The provisions requires OPM
to report to Congress on the use of the authority under this
section within six months after enactment, and annually
thereafter, if the authority is used.
Section 13 provides for costs of the Act to be paid from
the Civil Service Retirement Fund. It also authorizes OPM to
spend money from that Fund to administer the Act.
Section 14 deals with service credit deposits which can be
affected by actions under the Act. Subsection (a) provides
for payment of interest on partial refunds of service credit
deposits required as a result of corrective actions.
Subsection (b) provides for collection by actuarial annuity
reduction of certain additional service credit deposits
required as a result of corrective actions.
Section 15 provides that the Office may prescribe
regulations necessary for the administration of the Act. In
addition, it requires that OPM's regulations protect the
rights of a former spouse with entitlement to an
apportionment of benefits or to survivor
[[Page S1352]]
benefits based on the service of the employee.
Section 16 provides that except as otherwise provided, the
Act shall be effective upon enactment.
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