[Congressional Record Volume 144, Number 21 (Thursday, March 5, 1998)]
[Senate]
[Pages S1436-S1461]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mrs. HUTCHISON (for herself, Mr. Grams, and Mr. Ashcroft):
  S. 1711. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the marriage penalty tax, to increase the income levels for 
the 15 and 28 percent tax brackets, to provide a 1-year holding period 
for long-term capital gains, to index capital assets for inflation, to 
reduce the highest estate tax rate to 28 percent, and for other 
purposes; to the Committee on Finance.


             THE TAX RELIEF AND DEBT REDUCTION ACT OF 1998

  Mrs. HUTCHISON. Mr. President, today Senator Rod Grams and I are 
introducing the half-and-half bill. We like to say half-and-half is 
more than just rich milk. We want to have the plan in place so if we, 
in fact, have a surplus, we will start doing the responsible thing for 
the people of our country. We believe half should go to debt reduction, 
to start paying down the $5 trillion debt, and half should go to tax 
relief for the hard-working American family.
  The Federal tax burden today is the greatest that it has been in the 
history of our country. In fact, 38.3 percent of the average family 
income is spent on taxes. That is a whale of a burden on people who are 
trying to raise children, trying to put them through college, and we 
are very pleased to try to bring down that tax burden with the half-
and-half Tax Relief and Debt Reduction Act of 1998.
  This is what our bill does. First, it eliminates the marriage tax 
penalty by allowing couples to file as singles. Mr. President, 21 
million American couples today pay an average of $1,400 more because 
they got married. You see behind me an example, and this is a real 
example. A first-year schoolteacher in Houston is paid $27,000. A 
rookie police officer in Houston, TX starts out at $29,698. After they 
get married, their tax burden will be $638.44 more, just because they 
got married. We do not think that is right. We do not believe that 
Americans should have to choose between love and money. We want an 
equitable and fair burden on the taxpayers of this country, and we do 
not think that people who get married, who are both working, should 
have to pay more taxes.
  The second thing our bill does is raise the income levels for the 15 
and 28 percent tax brackets. For a single person, before he or she 
would move into the 28 percent bracket, it would go up to $35,000; a 
married couple, $50,000, and for a head of household it would be 
$40,000. The 28 percent bracket would be expanded for a single person 
to $71,050; a married couple at $109,950, and head of household $93,750
  It is very important that we start giving that relief at these lower 
income and middle income levels, and that is what this bill will do.
  The bill also repeals the 18-month capital gains holding period and 
makes it 12 months instead. It is a fact that our elderly people pay 
the most in capital gains taxes, and we think that is wrong. So we are 
going to try to reduce the holding period so our elderly people who may 
have to sell assets to live on will not be burdened any more than is 
absolutely necessary.
  We index capital gains taxes for inflation in our bill. Taxpayers 
should not have to pay a capital gains tax in assets that have 
increased in value simply due to inflation. Last year we started this 
process of by allowing an exemption of $500,000 in capital gains for 
the sale of a home. That's a big help to an elderly person. We want to 
make it even easier for them.
  We would cut the top estate tax rate from 55 percent to 28 percent. 
We believe estate taxes take away from the ability of Americans to 
realize the American dream of giving their children a better start.
  So we are trying to bring down the tax burden on the hard-working 
American family. We believe it is important that people be able to keep 
more of the money they earn, and 38 percent of the average American's 
pay, salary, going to taxes, is too much of a burden. So I am very 
pleased Senator Grams has come on as the major cosponsor of this bill.
  Mr. GRAMS: Mr. President, I rise today to join Senator Hutchison in 
introducing legislation to lockbox any budget surplus for tax relief 
and national debt reduction. Given this week's budget surplus 
projections, the ``Tax Relief and Debt Reduction Act of 1998'' is the 
right legislation at the right time.
  Eighty-five years ago this week, the Internal Revenue Service began 
collecting the individual income tax, initiating 85 years of ever-
increasing hardship for America's taxpaying families. Now, with a 
budget surplus closer and taxes at an all-time high, it is time that 
Washington let the taxpayers keep more of their own money, so that 
families can spend it meeting their own needs--whether that is child 
care, health insurance, clothing, or groceries. By dedicating half of 
any budget surplus to reducing the debt and the other half to family 
tax relief, Senator Hutchison's legislation protects the taxpayers of 
today while reducing the burden on the taxpayers of tomorrow. I commend 
her for her leadership on this timely issue.
  Mr. President, I would like to offer some perspective into why we are 
introducing the ``Tax Relief and Debt Reduction Act" today.
  If it seems as though the media has a label for everyone these days, 
blame it on the era of the 15-second sound bite. At a point in history 
when many in the media consider brevity the most virtuous of virtues, 
journalists compete for our attention by whittling down their words 
into a kind of reporter's shorthand that, over time, becomes 
meaningless to news consumers.
  The shorthand gets especially muddied when it is applied to politics. 
Once a person enters public office, the media is quick to toss them a 
label--conservative or liberal, left wing or right wing. As political 
realities evolve, though, the labels have less and less relevance as 
time goes on. They become a cliche, no longer very useful in describing 
a political philosophy.
  I believe the American public has already moved beyond the media in 
breaking from the label mentality, and whether they consider it 
consciously, they have shifted their thinking from the old concept of 
liberal versus conservative to that of taxpayers versus big Government. 
Today, every action of the government is being evaluated by a standard 
that strikes home for the folks who work for a living, raise a family, 
and pay their taxes: does it benefit the taxpayers or does it benefit 
the Government?
  What we have discovered through this new way of thinking is that far 
too often, the Government is prospering at the expense of the 
taxpayers. Too much faith in Government equals less freedom for 
families and individuals. Dependency on Government equals less 
independence for the governed. And as the Government prospers, we have 
learned that big Government does not necessarily translate into better 
Government--it is just bigger Government, with more bureaucracy, paid 
for by higher taxes.
  Families today are taxed at the highest levels since World War II, 
with 38 percent of a typical family's budget going to pay taxes on the 
Federal, State, and local level. In nominal dollars, a two-income 
family is paying more just in taxes today than their paychecks totaled 
in 1977. That is nearly 50% more than they are spending for food, 
shelter, and clothing combined.
  Taxpayers do not mind paying taxes when they can see results. In 
local government, the results are obvious: clean streets, police cars 
on patrol, regular garbage pickup. On the Federal level, the results 
are much less evident. Families want to believe Washington is

[[Page S1437]]

spending their tax dollars prudently, but when the evening newscasts 
focus repeatedly on the ``fleecing of America,'' they wonder: is the 
Government serving the taxpayers, or just serving itself?
  There is no question the Federal Government is growing bigger. 
Contrary to the claim of President Clinton in his State of the Union 
address that ``we have the smallest Government in 35 years,'' the 
Federal Government will spend more tax dollars in 1998 than it has in 
the history of this nation--$1.7 trillion. That is a 19 percent 
increase since the President took office in 1993, although inflation 
during that same period has risen less than 14 percent.
  The President would add thousands of new civilian federal employees 
and, according to an analysis of his budget by the Senate Budget 
Committee, $123 billion in new federal programs that would touch nearly 
every aspect of daily life, from our classrooms to our boardrooms to 
our bedrooms.
  To pay for all that new government, the President calls for boosting 
taxes by $115 billion over the next five years. That is a massive hike 
that would effectively wipe out the hard-fought $85 billion tax cut 
Americans won under last year's Taxpayer Relief Act.
  A big, expensive federal government is a bad deal for the taxpayers. 
It is an even worse deal for my fellow Minnesotans. A recent study 
conducted by the Northeast-Midwest Institute shows that Minnesota ranks 
49th of 50 states in Federal dollars returned to the State. The people 
of Minnesota pay one of highest tax rates in the Nation, but only one 
other state receives less service in return from the Federal 
Government.
  According to the National Taxpayers Union, if Congress could roll 
federal domestic spending back to 1969 levels, a family of four would 
keep $9,000 a year more of its own money than it does today. Millions 
of families would pay no income tax at all. Unfortunately, tax-and-
spend, not tax relief and streamlining, is the policy Washington now 
pursues.
  The most disturbing sign that the taxpayers are losing the 
``taxpayers versus big government'' debate is the rush in Washington to 
spend a budget surplus that does not yet exist. If a surplus does 
develop, the Government has no claim on it because the Government did 
not generate it. A surplus will be borne of the sweat and hard work of 
the American people, and it therefore should be returned to the people 
as called for under the ``Tax Relief and Debt Reduction Act of 1998.''
  When Washington serves itself instead of meeting the needs of its 
owners, the taxpayers, spending rises, taxes increase, responsibilities 
are neglected, and people begin to feel constricted by a Government 
they sense is deeply out of touch. At their urging, we have begun to 
turn the focus away from the smothering squeeze of big government 
toward families and new partnerships that move Washington from the 
center of the circle to another spoke along its hub. Where the Federal 
Government once held all the power, communities--local churches, 
nonprofit organizations, job providers, individual volunteers, and 
charities of all types--have stepped forward to work with neighbors to 
attack problems on the local level.
  Freedom for families also means giving families the freedom to spend 
more of their own dollars as they choose. We have taken steps in 
Washington to return more of that control to working Minnesotans and 
all working Americans, through tax relief, beginning with passage last 
year of the $500 per-child tax credit.
  Mr. President, the states offer us an excellent model of how we 
should use a future budget surplus. In recent years, many Republican 
governors cut taxes and shrank the size of their governments, and in 
the process turned budget deficits into surpluses. They are now using 
those surpluses to provide further tax relief. Take my own State of 
Minnesota, for example. When Governor Arne Carlson was elected to 
office in 1990, he inherited a deficit greater than $1.8 billion and a 
government that was spending 15 percent faster than the rate of 
inflation. Today, the State government has a $1.3 billion budget 
surplus. Now the Governor is using the surplus to give Minnesotans a 
property tax cut and an increase in the education homestead credit. 
Returning a future surplus to those who created it, the Nation's 
hardworking taxpayers, is the right way to use that surplus.
  I agree with President Clinton that saving Social Security is vitally 
important. But I believe we can save Social Security and provide tax 
relief simultaneously, if we have the political will to enact sound 
fiscal policies. The best way to save Social Security is to stop 
looting the Social Security surplus to fund general Government 
programs, return the borrowed surplus to the trust funds, and begin 
real reform to change the system from ``paygo'' to one that is 
prefunded.
  As the Federal Government has grown, it is ironic that it has grown 
further away from the one thing from which it derives its strength. And 
that is the people. In 1998, Congress and the President have the power 
to bring government closer to the people, to refocus its attention on 
serving the taxpayers, not fortifying itself. Yet, while Washington may 
have the power to change, does it have the resolve to change? I believe 
it does, because if we intend to reduce the growing burden awaiting the 
next generation of taxpayers, ``Failure is not an option.''
  In closing, the Hutchison legislation would help move government 
toward the taxpayers and toward greater accountability, and I urge my 
colleagues to support it.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I thank Senator Grams for taking a 
leadership role in this. He has been dedicated, since he was elected to 
the U.S. Senate, to sound fiscal policies. I think this bill is a sound 
approach to any surplus that we might have. I appreciate his 
cosponsorship.
  I ask unanimous consent to add Senator Ashcroft as a third original 
cosponsor of the bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. Mr. President, just to sum up. I think the Hutchison-
Grams-Ashcroft half and half bill is sound policy. It is a responsible 
approach. If we, indeed, have worked hard and cut the deficits and will 
go toward a balanced budget even sooner than we thought, I think we 
create a great dilemma of what to do with the surplus. Because we have 
worked so hard and become more efficient, I hope we will take this 
opportunity not to backslide, not to go into more spending programs 
that will put us in the same situation we were before, but instead take 
the opportunity to start paying down the $5 trillion debt.
  So this would be an opportunity to start paying down the debt and put 
in the pockets of hard-working Americans more of the money they earn. 
Thirty-eight percent of a person's income is too much to be doling out 
to Government programs that you may or may not think are a good 
priority.
  So we are going to try to lessen that at the same time that we begin 
to pay down the debt so our children and grandchildren will not have to 
take from us that kind of burden. Thank you, Mr. President. I thank the 
managers of the bill for allowing us to take this time to introduce the 
bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
record, as follows:

                                S. 1711

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Half and 
     Half: Tax Relief and Debt Reduction Act of 1998''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Section 15 Not To Apply.--No amendment made by section 
     3 shall be treated as a change in a rate of tax for purposes 
     of section 15 of the Internal Revenue Code of 1986.

     SEC. 2. COMBINED RETURN TO WHICH UNMARRIED RATES APPLY.

       (a) In General.--Subpart B of part II of subchapter A of 
     chapter 61 (relating to income tax returns) is amended by 
     inserting after section 6013 the following new section:

[[Page S1438]]

     ``SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.

       ``(a) General Rule.--A husband and wife may make a combined 
     return of income taxes under subtitle A under which--
       ``(1) a separate taxable income is determined for each 
     spouse by applying the rules provided in this section, and
       ``(2) the tax imposed by section 1 is the aggregate amount 
     resulting from applying the separate rates set forth in 
     section 1(c) to each such taxable income.
       ``(b) Treatment of Income.--For purposes of this section--
       ``(1) earned income (within the meaning of section 911(d)), 
     and any income received as a pension or annuity which arises 
     from an employer-employee relationship, shall be treated as 
     the income of the spouse who rendered the services, and
       ``(2) income from property shall be divided between the 
     spouses in accordance with their respective ownership rights 
     in such property.
       ``(c) Treatment of Deductions.--For purposes of this 
     section--
       ``(1) except as otherwise provided in this subsection, the 
     deductions allowed by section 62(a) shall be allowed to the 
     spouse treated as having the income to which such deductions 
     relate,
       ``(2) the deduction for retirement savings described in 
     paragraph (7) of section 62(a) shall be allowed to the spouse 
     for whose benefit the savings are maintained,
       ``(3) the deduction for alimony described in paragraph (10) 
     of section 62(a) shall be allowed to the spouse who has the 
     liability to pay the alimony,
       ``(4) the deduction referred to in paragraph (16) of 
     section 62(a) (relating to contributions to medical savings 
     accounts) shall be allowed to the spouse with respect to 
     whose employment or self-employment such account relates,
       ``(5) the deductions allowable by section 151 (relating to 
     personal exemptions) shall be determined by requiring each 
     spouse to claim 1 personal exemption,
       ``(6) section 63 shall be applied as if such spouses were 
     not married, and
       ``(7) each spouse's share of all other deductions 
     (including the deduction for personal exemptions under 
     section 151(c)) shall be determined by multiplying the 
     aggregate amount thereof by the fraction--
       ``(A) the numerator of which is such spouse's adjusted 
     gross income, and
       ``(B) the denominator of which is the combined adjusted 
     gross incomes of the 2 spouses.

     Any fraction determined under paragraph (7) shall be rounded 
     to the nearest percentage point.
       ``(d) Treatment of Credits.--Credits shall be determined 
     (and applied against the joint liability of the couple for 
     tax) as if the spouses had filed a joint return.
       ``(e) Treatment as Joint Return.--Except as otherwise 
     provided in this section or in the regulations prescribed 
     hereunder, for purposes of this title (other than sections 1 
     and 63(c)) a combined return under this section shall be 
     treated as a joint return.
       ``(f) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section.''.
       (b) Unmarried Rate Made Applicable.--So much of subsection 
     (c) of section 1 as precedes the table is amended to read as 
     follows:
       ``(c) Separate or Unmarried Return Rate.--There is hereby 
     imposed on the taxable income of every individual (other than 
     a married individual (as defined in section 7703) filing a 
     joint return or a separate return, a surviving spouse as 
     defined in section 2(a), or a head of household as defined in 
     section 2(b)) a tax determined in accordance with the 
     following table:''.
       (c) Basic Standard Deduction for Unmarried Individuals Made 
     Applicable.--Subparagraph (C) of section 63(c)(2) is amended 
     to read as follows:
       ``(C) $3,000 in the case of an individual who is not--
       ``(i) a married individual filing a joint return or a 
     separate return,
       ``(ii) a surviving spouse, or
       ``(iii) a head of household, or''.
       (d) Clerical Amendment.--The table of sections for subpart 
     B of part II of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6013 the 
     following:

``Sec. 6013A. Combined return with separate rates.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 3. INCOME TAXED AT LOWEST RATE INCREASED TO $35,000 FOR 
                   UNMARRIED INDIVIDUALS, $40,000 FOR HEADS OF 
                   HOUSEHOLDS, AND $50,000 FOR JOINT RETURNS AND 
                   SURVIVING SPOUSES.

       (a) General Rule.--Section 1 (relating to tax imposed) is 
     amended by striking subsections (a) through (e) and inserting 
     the following:
       ``(a) Married Individuals Filing Joint Returns and 
     Surviving Spouses.--There is hereby imposed on the taxable 
     income of--
       ``(1) every married individual (as defined in section 7703) 
     who makes a single return jointly with his spouse under 
     section 6013, and
       ``(2) every surviving spouse (as defined in section 2(a)),

     a tax determined in accordance with the following table:

The tax is:e income is:
15% of taxable income..................................................
$7,500, plus 28% of the excess over $50,000............................
$24,286, plus 31% of the excess over $109,950..........................
$38,546, plus 36% of the excess over $155,950..........................
$82,646, plus 39.6% of the excess over $278,450........................

       ``(b) Heads of Households.--There is hereby imposed on the 
     taxable income of every head of a household (as defined in 
     section 2(b)) a tax determined in accordance with the 
     following table:

The tax is:e income is:
15% of taxable income..................................................
$6,000, plus 28% of the excess over $40,000............................
$21,050, plus 31% of the excess over $93,750...........................
$36,007, plus 36% of the excess over $142,000..........................
$85,129 plus 39.6% of the excess over $278,450.........................

       ``(c) Separate or Unmarried Return Rate.--There is hereby 
     imposed on the taxable income of every individual (other than 
     a married individual (as defined in section 7703) filing a 
     joint return or a separate return, a surviving spouse as 
     defined in section 2(a), or a head of household as defined in 
     section 2(b)) a tax determined in accordance with the 
     following table:

The tax is:e income is:
15% of taxable income..................................................
$5,250, plus 28% of the excess over $35,000............................
$15,344, plus 31% of the excess over $71,050...........................
$33,029, plus 36% of the excess over $128,100..........................
$87,155, plus 39.6% of the excess over $278,450........................

       ``(d) Married Individuals Filing Separate Returns.--There 
     is hereby imposed on the taxable income of every married 
     individual (as defined in section 7703) who does not make a 
     single return jointly with his spouse under section 6013, a 
     tax determined in accordance with the following table:

The tax is:e income is:
15% of taxable income..................................................
$3,750, plus 28% of the excess over $25,000............................
$12,143, plus 31% of the excess over $54,975...........................
$19,273, plus 36% of the excess over $77,975...........................
$41,323, plus 39.6% of the excess over $139,225........................

       ``(e) Estates and Trusts.--There is hereby imposed on the 
     taxable income of--
       ``(1) every estate, and
       ``(2) every trust,

     taxable under this subsection a tax determined in accordance 
     with the following table:

The tax is:e income is:
15% of taxable income..................................................
$255, plus 28% of the excess over $1,700...............................
$899, plus 31% of the excess over $4,000...............................
$1,550, plus 36% of the excess over $6,100.............................
$2,360, plus 39.6% of the excess over $8,350.''........................

       (b) Inflation Adjustment To Apply in Determining Rates for 
     1999.--Subsection (f) of section 1 is amended--
       (1) by striking ``1993'' in paragraph (1) and inserting 
     ``1998'',
       (2) by striking ``1992'' in paragraph (3)(B) and inserting 
     ``1997'', and
       (3) by striking paragraph (7).
       (c) Conforming Amendments.--
       (1) The following provisions are each amended by striking 
     ``1992'' and inserting ``1997'' each place it appears:
       (A) Section 25A(h).
       (B) Section 32(j)(1)(B).
       (C) Section 41(e)(5)(C).
       (D) Section 42(h)(6)(G)(i)(II).
       (E) Section 68(b)(2)(B).
       (F) Section 135(b)(2)(B)(ii).
       (G) Section 151(d)(4).
       (H) Section 221(g)(1)(B).
       (I) Section 512(d)(2)(B).
       (J) Section 513(h)(2)(C)(ii).
       (K) Section 877(a)(2).
       (L) Section 911(b)(2)(D)(ii)(II).
       (M) Section 4001(e)(1)(B).
       (N) Section 4261(e)(4)(A)(ii).
       (O) Section 6039F(d).
       (P) Section 6334(g)(1)(B).
       (Q) Section 7430(c)(1).
       (2) Subparagraph (B) of section 59(j)(2) is amended by 
     striking ``, determined by substituting `1997' for `1992' in 
     subparagraph (B) thereof''.
       (3) Subparagraph (B) of section 63(c)(4) is amended by 
     striking ``by substituting for'' and all that follows and 
     inserting ``by substituting for `calendar year 1997' in 
     subparagraph (B) thereof `calendar year 1987' in the case of 
     the dollar amounts contained in paragraph (2) or (5)(A) or 
     subsection (f).''.
       (4) Subparagraph (B) of section 132(f)(6) is amended by 
     inserting before the period ``, determined by substituting 
     `calendar year 1992' for `calendar year 1997' in subparagraph 
     (B) thereof''.
       (5) Paragraph (2) of section 220(g) is amended by striking 
     `` by substituting `calendar year 1997' for `calendar year 
     1992' in subparagraph (B) thereof''.
       (6) Subparagraph (B) of section 685(c)(3) is amended by 
     striking ``, by substituting `calendar year 1997' for 
     `calendar year 1992' in subparagraph (B) thereof''.
       (7) Subparagraph (B) of section 2032A(a)(3) is amended by 
     striking ``by substituting `calendar year 1997' for `calendar 
     year 1992' in subparagraph (B) thereof''.

[[Page S1439]]

       (8) Subparagraph (B) of section 2503(b)(2) is amended by 
     striking ``by substituting `calendar year 1997' for `calendar 
     year 1992' in subparagraph (B) thereof''.
       (9) Paragraph (2) of section 2631(c) is amended by striking 
     ``by substituting `calendar year 1997' for `calendar year 
     1992' in subparagraph (B) thereof''.
       (10) Subparagraph (B) of 6601(j)(3) is amended by striking 
     ``by substituting `calendar year 1997' for `calendar year 
     1992' in subparagraph (B) thereof''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 4. 1-YEAR HOLDING PERIOD FOR ANY LONG-TERM CAPITAL GAIN.

       (a) In General.--Section 1(h)(4) (defining adjusted net 
     capital gain) is amended by adding ``and'' at the end of 
     subparagraph (B), by striking ``, and'' at the end of 
     subparagraph (C) and inserting a period, and by striking 
     subparagraph (D).
       (b) Conforming Amendments.--Section 1(h) is amended--
       (1) in paragraph (6), by striking subparagraph (A) and 
     inserting the following:
       ``(A) In general.--The term `unrecaptured section 1250 
     gain' means the amount of long-term capital gain which would 
     be treated as ordinary income if section 1250(b)(1) included 
     all depreciation and the applicable percentage under section 
     1250(a) were 100 percent.'',
       (2) by striking paragraphs (8), (10), and (11),
       (3) in paragraph (9), by striking ``section 1202 gain, or 
     mid-term gain'' and inserting ``or section 1202 gain'',
       (4) by redesignating paragraph (9) as paragraph (8), and
       (5) by adding at the end the following:
       ``(8) Treatment of pass-thru entities.--
       ``(A) In general.--The Secretary may prescribe such 
     regulations as are appropriate (including regulations 
     requiring reporting) to apply this subsection in the case of 
     sales and exchanges by pass-thru entities and of interests in 
     such entities.
       ``(B) Pass-thru entity defined.--For purposes of 
     subparagraph (A), the term `pass-thru entity' means--
       ``(i) a regulated investment company,
       ``(ii) a real estate investment trust,
       ``(iii) an S corporation,
       ``(iv) a partnership,
       ``(v) an estate or trust, and
       ``(vi) a common trust fund.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 5. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       (a) In General.--Part II of subchapter O of chapter 1 
     (relating to basis rules of general application) is amended 
     by inserting after section 1021 the following new section:

     ``SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF 
                   DETERMINING GAIN OR LOSS.

       ``(a) General Rule.--
       ``(1) Indexed basis substituted for adjusted basis.--Except 
     as provided in paragraph (2), if an indexed asset which has 
     been held for more than 1 year is sold or otherwise disposed 
     of, then, for purposes of this title, the indexed basis of 
     the asset shall be substituted for its adjusted basis.
       ``(2) Exception for depreciation, etc.--The deduction for 
     depreciation, depletion, and amortization shall be determined 
     without regard to the application of paragraph (1) to the 
     taxpayer or any other person.
       ``(b) Indexed Asset.--
       ``(1) In general.--For purposes of this section, the term 
     `indexed asset' means--
       ``(A) stock in a corporation, and
       ``(B) tangible property (or any interest therein), which is 
     a capital asset or property used in the trade or business (as 
     defined in section 1231(b)).
       ``(2) Certain property excluded.--For purposes of this 
     section, the term `indexed asset' does not include--
       ``(A) Creditor's interest.--Any interest in property which 
     is in the nature of a creditor's interest.
       ``(B) Options.--Any option or other right to acquire an 
     interest in property.
       ``(C) Net lease property.--In the case of a lessor, net 
     lease property (within the meaning of subsection (h)(1)).
       ``(D) Certain preferred stock.--Stock which is preferred as 
     to dividends and does not participate in corporate growth to 
     any significant extent.
       ``(E) Stock in certain corporations.--Stock in--
       ``(i) an S corporation (within the meaning of section 
     1361),
       ``(ii) a personal holding company (as defined in section 
     542), and
       ``(iii) a foreign corporation.
       ``(3) Exception for stock in foreign corporation which is 
     regularly traded on national or regional exchange.--Clause 
     (iii) of paragraph (2)(E) shall not apply to stock in a 
     foreign corporation the stock of which is listed on the New 
     York Stock Exchange, the American Stock Exchange, or any 
     domestic regional exchange for which quotations are published 
     on a regular basis other than--
       ``(A) stock of a foreign investment company (within the 
     meaning of section 1246(b)), and
       ``(B) stock in a foreign corporation held by a United 
     States person who meets the requirements of section 
     1248(a)(2).
       ``(c) Indexed Basis.--For purposes of this section--
       ``(1) General rule.--The indexed basis for any asset is--
       ``(A) the adjusted basis of the asset, increased by
       ``(B) the applicable inflation adjustment.
       ``(2) Applicable inflation adjustment.--The applicable 
     inflation adjustment for any asset is an amount equal to--
       ``(A) the adjusted basis of the asset, multiplied by
       ``(B) the percentage (if any) by which--
       ``(i) the chain-type price index for GDP for the last 
     calendar quarter ending before the asset is disposed of, 
     exceeds
       ``(ii) the chain-type price index for GDP for the last 
     calendar quarter ending before the asset was acquired by the 
     taxpayer.

     The percentage under subparagraph (B) shall be rounded to the 
     nearest \1/10\ of 1 percentage point.
       ``(3) Chain-type price index for GDP.--The chain-type price 
     index for GDP for any calendar quarter is such index for such 
     quarter (as shown in the last revision thereof released by 
     the Secretary of Commerce before the close of the following 
     calendar quarter).
       ``(d) Special Rules.--For purposes of this section--
       ``(1) Treatment as separate asset.--In the case of any 
     asset, the following shall be treated as a separate asset:
       ``(A) a substantial improvement to property,
       ``(B) in the case of stock of a corporation, a substantial 
     contribution to capital, and
       ``(C) any other portion of an asset to the extent that 
     separate treatment of such portion is appropriate to carry 
     out the purposes of this section.
       ``(2) Assets which are not indexed assets throughout 
     holding period.--
       ``(A) In general.--The applicable inflation ratio shall be 
     appropriately reduced for calendar months at any time during 
     which the asset was not an indexed asset.
       ``(B) Certain short sales.--For purposes of applying 
     subparagraph (A), an asset shall be treated as not an indexed 
     asset for any short sale period during which the taxpayer or 
     the taxpayer's spouse sells short property substantially 
     identical to the asset. For purposes of the preceding 
     sentence, the short sale period begins on the day after the 
     substantially identical property is sold and ends on the 
     closing date for the sale.
       ``(3) Treatment of certain distributions.--A distribution 
     with respect to stock in a corporation which is not a 
     dividend shall be treated as a disposition.
       ``(4) Section cannot increase ordinary loss.--To the extent 
     that (but for this paragraph) this section would create or 
     increase a net ordinary loss to which section 1231(a)(2) 
     applies or an ordinary loss to which any other provision of 
     this title applies, such provision shall not apply. The 
     taxpayer shall be treated as having a long-term capital loss 
     in an amount equal to the amount of the ordinary loss to 
     which the preceding sentence applies.
       ``(5) Acquisition date where there has been prior 
     application of subsection (a)(1) with respect to the 
     taxpayer.--If there has been a prior application of 
     subsection (a)(1) to an asset while such asset was held by 
     the taxpayer, the date of acquisition of such asset by the 
     taxpayer shall be treated as not earlier than the date of the 
     most recent such prior application.
       ``(6) Collapsible corporations.--The application of section 
     341(a) (relating to collapsible corporations) shall be 
     determined without regard to this section.
       ``(e) Certain Conduit Entities.--
       ``(1) Regulated investment companies; real estate 
     investment trusts; common trust funds.--
       ``(A) In general.--Stock in a qualified investment entity 
     shall be an indexed asset for any calendar month in the same 
     ratio as the fair market value of the assets held by such 
     entity at the close of such month which are indexed assets 
     bears to the fair market value of all assets of such entity 
     at the close of such month.
       ``(B) Ratio of 90 percent or more.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 90 percent or more, such ratio for 
     such month shall be 100 percent.
       ``(C) Ratio of 10 percent or less.--If the ratio for any 
     calendar month determined under subparagraph (A) would (but 
     for this subparagraph) be 10 percent or less, such ratio for 
     such month shall be zero.
       ``(D) Valuation of assets in case of real estate investment 
     trusts.--Nothing in this paragraph shall require a real 
     estate investment trust to value its assets more frequently 
     than once each 36 months (except where such trust ceases to 
     exist). The ratio under subparagraph (A) for any calendar 
     month for which there is no valuation shall be the trustee's 
     good faith judgment as to such valuation.
       ``(E) Qualified investment entity.--For purposes of this 
     paragraph, the term `qualified investment entity' means--
       ``(i) a regulated investment company (within the meaning of 
     section 851),
       ``(ii) a real estate investment trust (within the meaning 
     of section 856), and
       ``(iii) a common trust fund (within the meaning of section 
     584).
       ``(2) Partnerships.--In the case of a partnership, the 
     adjustment made under subsection (a) at the partnership level 
     shall be passed through to the partners.
       ``(3) Subchapter s corporations.--In the case of an 
     electing small business corporation, the adjustment under 
     subsection (a) at the corporate level shall be passed through 
     to the shareholders.
       ``(f) Dispositions Between Related Persons.--

[[Page S1440]]

       ``(1) In general.--This section shall not apply to any sale 
     or other disposition of property between related persons 
     except to the extent that the basis of such property in the 
     hands of the transferee is a substituted basis.
       ``(2) Related persons defined.--For purposes of this 
     section, the term `related persons' means--
       ``(A) persons bearing a relationship set forth in section 
     267(b), and
       ``(B) persons treated as single employer under subsection 
     (b) or (c) of section 414.
       ``(g) Transfers To Increase Indexing Adjustment or 
     Depreciation Allowance.--If any person transfers cash, debt, 
     or any other property to another person and the principal 
     purpose of such transfer is--
       ``(1) to secure or increase an adjustment under subsection 
     (a), or
       ``(2) to increase (by reason of an adjustment under 
     subsection (a)) a deduction for depreciation, depletion, or 
     amortization,

     the Secretary may disallow part or all of such adjustment or 
     increase.
       ``(h) Definitions.--For purposes of this section--
       ``(1) Net lease property defined.--The term `net lease 
     property' means leased real property where--
       ``(A) the term of the lease (taking into account options to 
     renew) was 50 percent or more of the useful life of the 
     property, and
       ``(B) for the period of the lease, the sum of the 
     deductions with respect to such property which are allowable 
     to the lessor solely by reason of section 162 (other than 
     rents and reimbursed amounts with respect to such property) 
     is 15 percent or less of the rental income produced by such 
     property.
       ``(2) Stock includes interest in common trust fund.--The 
     term `stock in a corporation' includes any interest in a 
     common trust fund (as defined in section 584(a)).
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Clerical Amendment.--The table of sections for part II 
     of subchapter O of chapter 1 is amended by inserting after 
     the item relating to section 1021 the following new item:

``Sec. 1022. Indexing of certain assets for purposes of determining 
              gain or loss.''.

       (c) Adjustment To Apply for Purposes of Determining 
     Earnings and Profits.--Subsection (f) of section 312 
     (relating to effect on earnings and profits of gain or loss 
     and of receipt of tax-free distributions) is amended by 
     adding at the end thereof the following new paragraph:
       ``(3) Effect on earnings and profits of indexed basis.--

  For substitution of indexed basis for adjusted basis in the case of 
the disposition of certain assets after December 31, 1998, see section 
1022(a)(1).''.

       (d) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to the disposition of any property the holding period 
     of which begins after December 31, 1998.
       (2) Certain transactions between related persons.--The 
     amendments made by this section shall not apply to the 
     disposition of any property acquired after December 31, 1998, 
     from a related person (as defined in section 1022(f)(2) of 
     the Internal Revenue Code of 1986, as added by this section) 
     if--
       (A) such property was so acquired for a price less than the 
     property's fair market value, and
       (B) the amendments made by this section did not apply to 
     such property in the hands of such related person.

     SEC. 6. REDUCTION OF TOP ESTATE TAX RATE FROM 55 TO 28 
                   PERCENT.

       (a) In General.--Section 2001(c) (relating to imposition 
     and rate of tax) is amended to read as follows:
       ``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed 
    is:

The tentative tax is:
18 percent of such amount..............................................
$1,800 plus 20 percent of the excess of such amount over $10,000.......
$3,800 plus 22 percent of the excess of such amount over $20,000.......
$8,200 plus 24 percent of the excess of such amount over $40,000.......
$13,000 plus 26 percent of the excess of such amount over $60,000......
$18,200 plus 28 percent of the excess of such amount over $80,000.''...

       (b) Effective Date.--The amendment made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 1998.

     SEC. 7. REVENUE EFFECT OF ACT NOT TO EXCEED 50 PERCENT OF 
                   FEDERAL BUDGET SURPLUS.

       Not later than 90 days after the date of enactment of this 
     Act, if the Secretary of the Treasury determines that in any 
     of the 4 succeeding fiscal years the amendments made by this 
     Act will result in a reduction of the estimated revenues 
     received in the Treasury for such fiscal year in an amount in 
     excess of 50 percent of the estimated Federal unified budget 
     surplus (if any) for such year (determined without regard to 
     such amendments), the Secretary shall submit to the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate a legislative proposal to 
     appropriately modify the provisions of the Internal Revenue 
     Code of 1986 affected by such amendments to eliminate such 
     excess amount. Any legislation enacted for the purpose of 
     achieving the revenue effect of such legislative proposal 
     submitted pursuant to this subsection shall appropriately 
     identify such purpose.
                                 ______
                                 
      By Mr. JEFFORDS (for himself and Mr. Lieberman):
  S. 1712. A bill to amend title XXVII of the Public Health Service Act 
and part 7 of subtitle B of title I of the Employee Retirement Income 
Security Act of 1974 to improve the quality of health plans and provide 
protections for consumers enrolled in such plans; to the Committee on 
Labor and Human Resources.


      the health care quality, education, security, and trust act

  Mr. JEFFORDS. Mr. President, today, I join with my good friend 
Senator Lieberman to introduce the Health Care Quality, Education, 
Security, and Trust Act--``The Health Care QUEST Act''--in order to 
improve the quality of our nation's health care system and provide 
necessary consumer protections without adding significant new costs; 
increasing litigation; or micro managing health plans.

  Over the past decade across the country, an extraordinary change has 
taken place in the delivery of health care. In 1996, over 67% of 
Americans received their health care through managed care--almost 
double the percentage that existed in 1990. However, this transition 
has not been problem-free. Many consumers worry that the quality of 
their health care is being sacrificed to cut costs. While the 
traditional fee-for-service health care system was guilty of over 
utilization and runaway costs, consumers did feel that they would get 
the necessary services, treatment, and information to recover from a 
serious illness or manage a chronic health problem. People are now 
worried that managed care only manages costs and, in effect, rations 
care. One consequence of this transformation is that Americans are 
losing confidence in the quality of care they receive from our health 
system.
  The American Association of Health Plans' voluntary initiative to 
respond to these concerns, ``Putting Patients First,'' is an important 
step and I urge that they continue to expand this effort. Businesses, 
such as General Motors and GTE, have also initiated programs to improve 
the quality of the health care received by their employees. In 
addition, a number of states have already passed legislative 
initiatives to address many of the problems consumers have experienced 
with their health plans. However, I believe that Federal legislation is 
necessary because the Employee Retirement Income Security Act of 1974 
(ERISA) prevents states from enforcing health care quality standards 
that relate to the employer-sponsored health benefits that 148 million 
Americans receive.
  The Health Care QUEST Act addresses these concerns through four 
provisions. First, it creates a Health Quality Council to set national 
goals for improving health and serve as a resource for Congress and the 
President regarding health care quality. Second, it expands the duties 
and responsibilities of the Agency for Health Care Policy and Research 
(AHCPR) in order to develop the tools needed to measure and report 
health care quality. The Act also requires that employers and health 
plans provide enrollees with health plan information such as measures 
of consumer satisfaction and their right to access speciality health 
services. Finally, the Act calls for the establishment of the ``prudent 
layperson'' standard of access to emergency room care, the right to use 
an impartial independent external appeals process and the guarantee 
that a patient's health care professional is able to recommend the best 
treatment options and to serve as their advocate.
  These provisions will help to restore consumers confidence in the 
quality of our nation's health care system and provide a level playing 
field--so that managed care plan compete on the basis of quality as 
well as cost. Based on an analysis by the Lewin Group, the added costs 
for information disclosure and external appeals requirements are 
extremely low. The estimated monthly cost per person for comparative 
information and for external appeals with a

[[Page S1441]]

three year phase-in is only $0.88. This cost estimate doesn't take into 
account the improved market efficiency and increased competition that 
the Lewin Group indicates will be achieved with these requirements.
  Much of the debate over this issue to date in Washington has been 
conducted from two very divergent viewpoints. Many House members, and 
some in the Senate, believe we should regulate health care very 
closely, on a disease-by-disease or procedure-by-procedure basis. 
Another sizable camp believes that there is nothing wrong with the 
health care marketplace that can't be be sorted out by its own 
operation.
  Obviously, I disagree. And Congress, too, disagreed when it 
confronted many of these issues in the Medicare program last year. Much 
of what I propose in the Health Care QUEST Act is contained in the 
``Balanced Budget Act of 1997'' and applies to plans that enroll 
Medicare beneficiaries. Extending the same standards to the private 
sector will ensure that all Americans have the same rights and 
protections.
  The states have developed comprehensive approaches that provide 
regulation for those components of the health care system under their 
jurisdiction. The challenge for the federal government is to define 
regulatory solutions for those sectors under federal control that 
advance the consumer choice health care market while recognizing the 
voluntary nature of our private system. These regulatory solutions, in 
my opinion, should not determine medical necessity, establish hospital 
lengths-of-stay, or impede private sector initiatives. Furthermore, we 
must not set into statute standards that would preclude efforts for 
continued quality improvement or fail to recognize the evolutionary 
nature of medical practice.
  The McCarran-Ferguson Act of 1945 granted states the authority to 
regulate the business of insurance. However, ERISA preempted state law 
with regard to the regulation of employee benefit plans. While ERISA 
provides detailed standards for employer provided pensions, it provides 
only minimal standards for health plans. Currently about 41 percent of 
those who receive their health coverage through employer-sponsored 
plans are in self-insured health plans. The Health Care Quest Act 
follows the framework established under the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA) by setting national 
standards for employer sponsored plans under ERISA and a federal floor 
for insurance companies to follow that states can build upon.
  The Health Care QUEST Act will help to restore consumer confidence in 
our health care system and also promote market efficiency and 
accountability. I look forward to working with other Senators to enact 
legislation this year that establishes necessary consumer protections 
and sets national standards to guide our nation's market based health 
care reform efforts.
                                 ______
                                 
      By Mr. HOLLINGS:
  S. 1714. A bill to suspend through December 31, 1999, the duty on 
certain textile machinery; to the Committee on Finance.


                      duty suspension legislation

  Mr. HOLLINGS. Mr. President, today, I introduce duty suspension 
legislation designed to permit the import of certain textile weaving 
machinery into the United States duty free.
  The equipment to be imported is not manufactured in the United States 
and therefore its importation will not displace domestic sourcing. 
Moreover, because the product at issue is manufacturing equipment, it 
will assist in the creation of additional jobs in the textile industry.
  I believe that this is the most appropriate use of such legislation. 
I am therefore hopeful that this new capacity can be used to supply 
both domestic and foreign needs and will increase employment in the 
textile industry.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 1716. A bill to direct the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to develop an action plan to 
restore the Salton Sea in California and to conduct wildlife resource 
studies of the Salton Sea, to authorize the Secretary to carry out a 
project to restore the Salton Sea, and for other purposes, to the 
Committee on Environment and Public Works.


             SONNY BONO MEMORIAL SALTON SEA RESTORATION ACT

  Mrs. BOXER. Mr. President, today I am introducing the Sonny Bono 
Memorial Salton Sea Restoration Act. My legislation will lead to an 
efficient and responsible restoration of the unique Salton Sea 
ecosystem.
  Over the years, scientists, communities and politicians alike have 
been trying to draw national attention to the decline of the Salton 
Sea. Our late friend and colleague, Representative Sonny Bono, who died 
in a tragic skiing accident in January, worked tirelessly to make this 
issue an environmental priority for this Congress. With this 
legislation, we can carry on that legacy.
  The Salton Sea is a unique natural resource in Southern California. 
Created in 1905 by a breach in a levee along the Colorado River, the 
Salton Sea is California's largest inland body of water. It is one of 
the most important habitats for migratory birds along the Pacific 
Flyway.
  For 16 months after the breach, the Colorado River flowed into a dry 
lakebed, filling it to a depth of 80 feet. For a time following the 
closure of the levee, the water levels declined rapidly as evaporation 
greatly exceeded inflow. A minimum level was reached in the 1920s, 
after which the sea once again began to rise, due largely to the 
importation of water into the basin for agricultural purposes from the 
New and Alamo Rivers.
  Since there is no natural outlet for the sea at its current level, 
evaporation is the only way water leaves the basin. All the salts 
carried with water that flows into the sea have remained there, along 
with salts re-suspended from prehistoric/historic times by the new 
inundation. Salinity is currently more than 25 percent higher than 
ocean water, and rising.
  This extreme salinity, along with agricultural and wastewater in the 
sea, are rapidly deteriorating the entire ecosystem. The existing 
Salton Sea ecosystem is under severe stress and nearing collapse, with 
millions of fish and thousands of bird die-offs in recent years. Birds 
and fish that once thrived here are now threatened with death and 
disease as the tons of salts and toxic contaminants that are constantly 
dumped into the Salton Sea become more and more concentrated and deadly 
over time. The local economy is also being affected by the disaster at 
the Salton Sea by the loss of recreational opportunities, decrease in 
tourism, and the impact on agriculture.
  Despite the urgency of the situation, we do not have the solution at 
hand and, therefore, must move forward swiftly, but not hastily. The 
legislation I am introducing today allows the Department of Interior to 
adequately review all options for restoring the sea and comply with all 
environmental laws while also requiring tight, yet realistic, time 
frames.
  I have been working with local and national interests and received 
many favorable comments on my legislation. Secretary Bruce Babbitt 
said, ``I have had an opportunity to review the Salton Sea legislation 
that Senator Boxer is introducing this morning. In my judgement, the 
bill as drafted reflects a more thoughtful and practical approach for 
addressing the serious environmental challenges that face the Salton 
Sea. I look forward to working with the Senator in refining and, 
hopefully implementing this important initiative.''
  John Flicker, President of the National Audubon Society said, ``The 
National Audubon Society strongly endorses this legislation by Senator 
Boxer. This bill sets in motion a process to determine the source of 
the ecological crisis facing the Salton Sea and provide recommendations 
on how to reverse the Salton Sea's rapid deterioration.''
  Senator Boxer's bill represents an important step forward in the 
fight to save the Salton Sea,'' said Congressman George Brown. ``She 
has done an outstanding job building a consensus bill that can win 
local and federal support.''
  And the Tellis Codekas, President of the Salton Sea Authority and 
President of the Coachella Valley Water District said, ``Senator Boxer 
is on the right track with her bill. Her legislation builds on a 
bipartisan local and national effort to save the Salton Sea.''

[[Page S1442]]

  I am proud of this support. Under my legislation, Interior will 
report to Congress within one year on the options for restoring the 
Salton Sea, including a recommendation for a preferred option. Interior 
will review ways to reduce and stabilize salinity, stabilize surface 
elevation, restore the health of fish and wildlife resources and their 
habitats, enhance recreational use and economic development, and 
continue the use the Salton Sea for irrigation drainage.
  Interior then has another 6 months within which it must complete all 
environmental compliance and permitting activities required to 
implement the proposal. By the end of this eighteen month period, 
Interior must submit a final report to Congress, at which time the 
authorization for construction is triggered, allowing Congress 30 
legislative days to make changes in the plan, or to stop it.
  We all now agree that we must take the necessary long-term and short-
term steps to stabilize salinity and contaminant levels to protect the 
dwindling fishery resources and to reduce the threats to migratory 
birds. However, there is no consensus on how that should be done.
  The legislation that I am introducing forces those decisions to be 
made in a timely manner. But, it is not necessary to waive the 
provisions of one of our landmark environmental laws, the National 
Environmental Policy Act of 1969, in order to force this process. We 
must deal with this situation quickly. But, we can take prompt and 
responsible actions within the framework of environmental laws.
  I would like to thank members of the Salton Sea Authority, including 
the Imperial County Board of Supervisors, the Riverside County Board of 
Supervisors, the Imperial Irrigation District, and the Coachella Valley 
Water District, National Audubon Society, Department of Interior, and 
Congressman George Brown for their assistance with this legislation. It 
is with the help and support of local and national interests that I was 
able to develop this consensus legislation.
  In a December 23, 1998 article in USA Today, Sonny said, ``This is 
our last chance. If we don't move within a year or two, it will be too 
late.'' He was right: the clock is ticking and we must act now to find 
a solution. Scientists have warned that the Salton Sea will be a dead 
sea within fifteen years.
  I am hopeful that my House and Senate colleagues and I can act 
quickly to ensure passage of this legislation to restore the ailing 
Salton Sea. This is necessary and important legislation that will not 
only benefit Californians and our natural heritage, but will also carry 
on the legacy of Representative Bono.
  I ask unanimous consent that the full text of my legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1716

       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 ``Sonny Bono Memorial Salton 
     Sea Restoration Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Salton Sea, located in Imperial County and 
     Riverside County, California, is an economic and 
     environmental resource of national importance;
       (2) the Salton Sea is a critical component of the Pacific 
     flyway;
       (3) the concentration of salinity or pollutants in the 
     Salton Sea has contributed to the recent deaths of migratory 
     waterfowl;
       (4) the Salton Sea is critical as a reservoir for 
     irrigation and municipal and stormwater drainage;
       (5) the Salton Sea provides benefits to surrounding 
     communities and nearby irrigation and municipal water users;
       (6) remediating the Salton Sea will provide national and 
     international benefits; and
       (7) Federal, State, and local governments have a shared 
     responsibility to assist in remediating the Salton Sea.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Salton sea authority.--The term ``Salton Sea 
     Authority'' means the Joint Powers Authority established 
     under the laws of the State of California by a Joint Power 
     Agreement signed on June 2, 1993.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Commissioner of 
     Reclamation.

     SEC. 4. SALTON SEA RESTORATION ACTION PLAN.

       (a) In General.--As soon as practicable after the date of 
     enactment of this Act, the Secretary, in accordance with the 
     memorandum of understanding entered into under subsection 
     (f), shall prepare an action plan for restoring the Salton 
     Sea in California.
       (b) Contents.--The action plan shall consist of--
       (1) a study of the feasibility of various alternatives for 
     remediating the Salton Sea;
       (2) the selection of 1 or more practicable and cost-
     effective options for remediating the Salton Sea; and
       (3) the development of a remediation plan that will 
     implement the options.
       (c) Objectives.--In preparing the action plan, the 
     Secretary shall evaluate options that will--
       (1) reduce and stabilize the overall salinity of the Salton 
     Sea to a level between 35 and 40 parts per thousand;
       (2) stabilize the surface elevation of the Salton Sea to a 
     level that is between 240 feet below sea level and 230 feet 
     below sea level;
       (3) restore habitat and reclaim water quality over the long 
     term to promote healthy fish and wildlife resources and their 
     habitats in the Salton Sea;
       (4) enhance the potential for recreational uses and 
     economic development of the Salton Sea; and
       (5) ensure the continued use of the Salton Sea as a 
     reservoir for irrigation and municipal and stormwater 
     drainage.
       (d) Options.--In evaluating options under the action plan, 
     the Secretary shall--
       (1) consider--
       (A) using impoundments to segregate a portion of the waters 
     of the Salton Sea in 1 or more evaporation ponds located in 
     the Salton Sea basin;
       (B) pumping water out of the Salton Sea;
       (C) augmenting the flow of water into the Salton Sea;
       (D) improving the quality of wastewater discharges from 
     Mexico (including discharges from the Alamo River, the 
     Whitewater River, and the New River) and from other water 
     users in the Salton Sea basin;
       (E) implementing any other economically feasible 
     remediation options; and
       (F) implementing any combination of the actions described 
     in subparagraphs (A) through (E); and
       (2) limit the options to economically feasible and proven 
     technologies.
       (e) Factors.--In evaluating the feasibility of options 
     under the action plan, the Secretary shall consider--
       (1) the ability of Federal, tribal, State, and local 
     government sources and private entities to fund capital 
     construction costs and annual operation, maintenance, energy, 
     and replacement costs; and
       (2) how and where to dispose, permanently and safely, of 
     water pumped out of the Salton Sea and any salts that may be 
     condensed and accumulated in implementing the option.
       (f) Memorandum of Understanding.--
       (1) In general.--The Secretary shall carry out the action 
     plan under this section in accordance with a memorandum of 
     understanding entered into with the Salton Sea Authority, the 
     Governor of the State of California, and such other tribal or 
     local entities as the Secretary considers appropriate.
       (2) Criteria.--The memorandum of understanding shall, at a 
     minimum, establish criteria for the evaluation and selection 
     of options under this section, including criteria for 
     determining the magnitude and practicability of costs of 
     construction, operation, and maintenance of each evaluated 
     option.
       (g) Relationship to Other Laws.--
       (1) Reclamation laws.--
       (A) In general.--An option recommended by the action plan 
     shall not be subject to the Act of June 17, 1902, and Acts 
     amendatory thereof or supplementary thereto (32 Stat. 388, 
     chapter 1093; 43 U.S.C. 371 et seq.) (including regulations 
     adopted under those Acts).
       (B) Nonreimbursable and nonreturnable.--Funds provided to 
     carry out the option shall be considered nonreimbursable and 
     nonreturnable.
       (2) Law of the river.--An option recommended by the action 
     plan--
       (A) shall not supersede or otherwise affect any treaty, 
     law, or agreement governing use of water from the Colorado 
     River; and
       (B) shall be carried out in a manner that is consistent 
     with rights and obligation of persons under all such 
     treaties, laws, and agreements.
       (h) Reports.--
       (1) Interim report.--Not later than 1 year after the date 
     of enactment of this Act, the Secretary shall submit to 
     Congress an interim report on the findings and 
     recommendations of the action plan, including--
       (A) a summary of options considered for remediating the 
     Salton Sea; and
       (B) a recommendation of a preferred option for remediating 
     the Salton Sea.
       (2) Final report.--Not later than 18 months after the date 
     of enactment of this Act, the Secretary shall submit to 
     Congress a final report on the findings and recommendations 
     of the action plan, including--
       (A) a plan to implement the preferred option;
       (B) a recommendation for sharing costs to carry out the 
     preferred option, with (at the option of the Secretary) a 
     different cost-sharing formula for capital construction costs 
     than is applied to annual operation, maintenance, energy, and 
     replacement costs; and

[[Page S1443]]

       (C) the completion of all environmental compliance and 
     permitting activities required for any construction activity 
     under the preferred option.
       (i) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $30,000,000.

     SEC. 5. SALTON SEA RESTORATION PROJECT.

       (a) In General.--Not later than 30 legislative days after 
     the Secretary submits the final report required under section 
     4(h)(2), the Secretary shall have the authority to carry out 
     a project for remediating the Salton Sea that is based on the 
     preferred option recommended in the final report, unless 
     otherwise directed by Congress.
       (b) Legislative Day.--In subsection (a), the term 
     ``legislative day'' means any day on which either House of 
     Congress is in session.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $300,000,000.

     SEC. 6. SALTON SEA WILDLIFE RESOURCES STUDIES.

       (a) In General.--Concurrently with the action plan carried 
     out under section 4, the Secretary shall enter into 
     contracts, grants, and cooperative agreements with Federal 
     and non-Federal entities to conduct studies recommended by 
     the Salton Sea Research Management Committee under subsection 
     (b)(1), including studies of hydrology, wildlife pathology, 
     and toxicology relating to the wildlife resources of the 
     Salton Sea.
       (b) Salton Sea Research Management Committee.--
       (1) In general.--The Secretary shall establish a committee, 
     to be known as the ``Salton Sea Research Management 
     Committee'', to make recommendations to the Secretary on the 
     selection of topics for studies under this section and 
     management of the studies.
       (2) Membership.--The Committee shall be composed of 4 
     members, of which--
       (A) 1 member shall be appointed by the Secretary;
       (B) 1 member shall be appointed by the Governor of the 
     State of California;
       (C) 1 member shall be appointed by the Torres Martinez 
     Desert Cahuilla Tribal Government; and
       (D) 1 member shall be appointed by the Salton Sea 
     Authority.
       (c) Coordination.--The Secretary shall ensure that studies 
     under this section are conducted in coordination with 
     appropriate international bodies, Federal agencies, and 
     California State agencies, including--
       (1) the International Boundary and Water Commission;
       (2) the United States Fish and Wildlife Service;
       (3) the Environmental Protection Agency;
       (4) the California Department of Water Resources;
       (5) the California Department of Fish and Game;
       (6) the California Resources Agency;
       (7) the California Environmental Protection Agency;
       (8) the California Regional Water Quality Board; and
       (9) California State Parks.
       (d) Peer Review.--The Secretary shall require that studies 
     conducted under this section be subject to peer review.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $7,000,000.

     SEC. 7. REDESIGNATION OF SALTON SEA NATIONAL WILDLIFE REFUGE 
                   RENAMED AS THE SONNY BONO SALTON SEA NATIONAL 
                   WILDLIFE REFUGE.

       (a) In General.--The Salton Sea National Wildlife Refuge, 
     in Imperial County, California, shall be known and designated 
     as the ``Sonny Bono Salton Sea National Wildlife Refuge''.
       (b) References.--Any reference in a law, map, regulation, 
     document, record, or other paper of the United States to the 
     Refuge referred to in subsection (a) shall be deemed to be a 
     reference to the ``Sonny Bono Salton Sea National Wildlife 
     Refuge''.

     SEC. 8. EMERGENCY ACTION TO STABILIZE SALTON SEA SALINITY.

       If, during the conduct of studies authorized by this Act, 
     the Secretary determines that environmental conditions at the 
     Salton Sea warrant immediate emergency action to stabilize 
     the salinity of the Salton Sea, the Secretary shall 
     immediately submit a report to Congress documenting the 
     conditions and making recommendations for their remediation, 
     together with specific recommendations for actions to be 
     required and the cost of the actions.
  Mrs. FEINSTEIN. Mr. President, today I join my colleague Senator 
Boxer in introducing the Sonny Bono Memorial Salton Sea Restoration 
Act. This legislation is similar to that now pending in the House of 
Representatives, but it seeks to respond to concerns expressed by 
local, state and federal officials about problems with the House bill. 
Despite the fact that there are differences between the two versions, 
the time to address the problems of the Salton Sea has come, 
legislation will move forward promptly, and be signed into law.
  I have spoken on this floor about the problems facing the Salton Sea. 
Now it is time to turn to how to solve those problems. The legislation 
introduced today reflects the work of scores of people in California 
concerned with the Salton Sea. It is consistent with the approach they 
believe is most appropriate, and it involves them in the process.
  This legislation proceeds in two stages.
  First, it provides funding and sets a deadline of 18 months for the 
conduct of additional scientific research on the problems facing the 
Salton Sea, for the evaluation of various projects to address these 
problems, for the selection of a specific project, and for the 
completion of the necessary environmental reviews required by the 
National Environmental Policy Act and the California Environmental 
Quality Act.
  Second, it authorizes funding, subject to modification by Congress, 
for the implementation of the project that is chosen.
  The research funded in this legislation is absolutely crucial, for 
the problems facing the Salton Sea are complex. Previously, most 
concerns expressed about the Sea related to its increasing salinity and 
its rising water level. More recently, however, massive die offs of 
fish and migratory birds have occurred, that appear to be caused by 
problems other than salinity.
  So, in addition to determining the optimum elevation for the Sea, and 
the desirable level of salinity, it is important to understand the 
interrelationships between these two components and the pollutants that 
continue to flow into the Sea.
  Finally, this legislation proposes a tight timetable for reaching a 
decision on the best project to solve the problems facing the Sea. 
However, it is my understanding that the Department of the Interior 
already has the authority and a limited amount of funding to begin 
additional testing and environmental review and is willing to do so. 
This means that an 18 month timetable is realistic. There has been deep 
concern that a 12 month timetable is insufficient if a sound plan is to 
evolve which also involves the rivers, now heavily polluted, which 
empty into and add contamination to the Salton Sea. Therefore, I urge 
all parties to begin working while this legislation moves through 
Congress.
  Mr. President, in closing, I want to say that I look forward to 
working with my colleagues in the House to craft a bill that is 
acceptable to both bodies, a bill that will preserve and enhance the 
Salton Sea, a bill that is a fitting tribute to the memory of the late 
Congressman Sonny Bono, who cared so deeply about the Salton Sea. Thank 
you.
                                 ______
                                 
      By Mr. KENNEDY:
  S. 1717. A bill to amend the Immigration and Nationality Act to 
strengthen the naturalization process; to the Committee on the 
Judiciary.


                    the new american citizenship act

  Mr. KENNEDY. Mr. President, few aspects of immigration are more 
important than the naturalization of new Americans. Naturalization goes 
to the heart of those we welcome to join our country. Unlike those of 
us who were born in this country, naturalized immigrants are Americans 
by choice. Naturalization is the occasion when these new citizens 
embrace our nation, and our nation embraces them.
  Unfortunately, America's immigrant heritage and history are under 
increasing attack today. Legal immigrants have been unfairly hurt by 
recent actions to deal with illegal immigration. Voting rights, welfare 
benefits, and naturalization itself are also under assault.
  It now takes two to four years for immigrants to become naturalized 
citizens. The backlogs continue to increase. It is time to improve the 
naturalization process, and deal more responsibly with these important 
issues.
  Today, Congressman Gephardt and I are introducing the ``New American 
Citizenship Act,'' because we believe legal immigrants deserve a fair, 
efficient and affordable way to become citizens. Our bill builds on the 
recent reforms by INS to reach out to potential new citizens, help them 
learn our history and form of government, and ensure that the 
naturalization process is one in which America can take pride.
  Our bill provides increased services, and requires INS to reduce the 
naturalization process to six months with no backlogs. We encourage 
local communities to help in this effort, by disseminating information 
to community-

[[Page S1444]]

based organizations on the requirements of citizenship and the contents 
of the naturalization exam. Under our proposal, INS cannot increase the 
naturalization fee to more than $150 until they have shown progress in 
reducing the backlog.
  In addition, we take specific steps to prevent fraud and abuse in the 
exam. We strengthen the fingerprint process to prevent the mistaken 
naturalization of unqualified applicants.
  Each naturalization ceremony represents the continuing renewal and 
revitalization of our country. As Barbara Jordan said,

       We are a nation of immigrants, dedicated to the rule of 
     law. That is our history and our challenge to ourselves. . . 
     . It is literally a matter of who we are as a nation and who 
     we become as a people. E Pluribus Unum. Out of many, one. One 
     people. The American people.

  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1717

       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 ``New American Citizenship 
     Act''.

     SEC. 2. DECLARATION AND PURPOSES.

       (a) Declarations.--(1) Congress declares that it is the 
     historic policy of the United States to welcome as new 
     American citizens those legal immigrants who qualify for 
     naturalization and who are committed to American democratic 
     principles, our form of Government, and the Constitution of 
     the United States.
       (2) Congress reaffirms the existing statutory requirements 
     for naturalization concerning good moral character, lawful 
     and continuous residence in the United States, and an 
     understanding of the English language and the history, 
     principles, and form of Government of the United States.
       (b) Purposes.--The purposes of this Act are to ensure 
     that--
       (1) the naturalization process of the United States 
     properly welcomes those who are committed to American 
     citizenship to participate fully in American civic life;
       (2) the act of naturalization is reserved for those who 
     meet the qualifications established by the Constitution and 
     the laws and policies of the United States;
       (3) individuals applying for naturalization are provided a 
     fair, efficient, and affordable process;
       (4) the backlog of pending applications for naturalization 
     is reduced so that qualified applicants may become new 
     American citizens within six months of applying for 
     naturalization; and
       (5) the Immigration and Naturalization Service provides 
     adequate assistance and information to individuals applying 
     for naturalization.

     SEC. 3. BACKLOG REDUCTION.

       (a) In General.--The Attorney General shall present to 
     Congress not later than 3 months after the date of enactment 
     of this Act a detailed plan for substantially reducing the 
     backlog at each district and regional office of the 
     Immigration and Naturalization Service. The plan shall 
     include specific target dates for reducing or eliminating the 
     backlog, and the percentage of reduction that will be 
     achieved by each target date.
       (b) Report.--During each of the fiscal years 1998, 1999, 
     2000, and 2001, the Attorney General shall submit a monthly 
     report to the Committees on the Judiciary of the Senate and 
     the House of Representatives concerning the progress that is 
     being made in meeting the targets to reduce the backlog of 
     naturalization applications.

     SEC. 4. EQUIPPING NEW AMERICANS FOR CITIZENSHIP.

       (a) Integrity of Testing Procedures.--The Attorney General 
     shall ensure that procedures utilized by the Immigration and 
     Naturalization Service to carry out the standardized 
     naturalization examinations include the following:
       (1) Administration of examinations.--
       (A) Proctoring.--All standardized naturalization 
     examinations shall be proctored by an entity certified by the 
     Immigration and Naturalization Service to perform such 
     function. The Immigration and Naturalization Service may 
     certify more than 1 entity to proctor naturalization 
     examinations.
       (B) Special rule for ``for-profit'' entities.--A for-profit 
     organization shall not be allowed to administer or proctor 
     the standardized naturalization examination if such 
     organization also provides citizenship courses.
       (2) Pilot program.--During the 24-month period beginning on 
     the date of enactment of this Act, the Attorney General, 
     through a board or contractor determined by the Attorney 
     General to be qualified to administer standardized 
     examinations, shall test the feasibility of administering 
     naturalization examinations to a representative sample of 
     immigrants throughout the United States. The Attorney General 
     shall allow for special arrangements for naturalization 
     applicants who are homebound, in nursing homes, need 
     expedited handling of their applications, or have other 
     extenuating circumstances or incapacitations.
       (A) Report.--Not later than 12 months after the institution 
     of the pilot program under this subsection, the Attorney 
     General shall submit a report to Congress regarding the 
     future feasibility of the program.
       (B) Requirements of board or contractor.--The board or 
     contractor selected by the Attorney General to develop and 
     administer a standardized test under the pilot program 
     shall--
       (i) be qualified to administer standardized examinations 
     and able to ensure the integrity of the examination process 
     through the use of proctors or other appropriate means;
       (ii) be able to offer the examination at multiple test 
     sites located within immigrant communities;
       (iii) prepare multiple versions of the naturalization 
     examination to be used at each examination site, and must 
     revise the examinations on at least a quarterly basis; and
       (iv) have the ability to offer the examination with enough 
     frequency to meet the needs of each community in which the 
     examination is offered.
       (C) Appeals.--The Attorney General shall provide an appeals 
     process to permit immigrants who fail the standardized 
     naturalization examination under the pilot program to either 
     have the examination results reviewed by an independent 
     examiner or retake the examination at no cost.
       (3) Content of test.--Any new or redesigned naturalization 
     examination developed pursuant to this Act shall not create 
     barriers to citizenship that did not exist under the 
     examinations used before the enactment of this Act.
       (b) Provision of Naturalization Materials.--
       (1) Materials for home-study.--The Attorney General through 
     the Immigration and Naturalization Service shall make 
     sufficient material, such as textbooks and sample questions, 
     available at no cost to naturalization applicants who choose 
     to study for the naturalization examination without the 
     assistance of a citizenship course.
       (2) Handbook.--Upon request, and at the time of adjustment 
     to or admission as a lawful permanent resident, the Attorney 
     General shall provide each such individual with a handbook 
     describing--
       (A) the process for obtaining citizenship through 
     naturalization, as well as information on the requirements 
     for naturalization, including the good moral character and 
     continuous residency requirements;
       (B) information on the civics and English language portions 
     of the naturalization examination; and
       (C) the privileges and responsibilities of citizenship, 
     including the right to vote only after taking the oath of 
     allegiance.
       (3) Dissemination of materials.--
       (A) In general.--The Attorney General shall widely 
     disseminate, at no cost, to public schools and organizations 
     that provide instruction on citizenship responsibilities and 
     prepare applicants for the naturalization examination 
     materials, such as textbooks, sample questions, and other 
     information regarding the content of the naturalization 
     examination that the Immigration and Naturalization Service 
     determines relevant to assist such organizations in preparing 
     applicants for the naturalization examination.
       (B) Development.--The materials described in this 
     subsection shall be developed in consultation with adult 
     educators and organizations that offer citizenship courses.
       (c) Effective Date.--Except as provided in subsection 
     (a)(2), this section shall take effect on the date that is 6 
     months after the date of enactment of this Act.

     SEC. 5. PLAN FOR ENSURING EFFICIENCY AND INTEGRITY OF THE 
                   NATURALIZATION PROCESS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Attorney General shall develop a 
     plan for ensuring the efficiency and integrity of the 
     naturalization process.
       (b) Objectives.--The plan described in subsection (a) shall 
     have the following objectives:
       (1) To substantially increase the efficiency of the 
     naturalization process, including the development of--
       (A) a system that requires the Immigration and 
     Naturalization Service to complete the entire naturalization 
     process in 6 months or less; and
       (B) a contingency plan the Immigration and Naturalization 
     Service will use to accommodate sudden increases in 
     applications, including arrangements with Congress for the 
     rapid reprogramming of funds and positions when necessary.
       (2) To increase the integrity and accuracy of 
     naturalization, by taking steps to ensure that--
       (A) the fingerprint process for naturalization applicants 
     is as accurate and secure as possible;
       (B) there is clear recourse for applicants with illegible 
     or nonexistent fingerprints, including communication in 
     writing from the Immigration and Naturalization Service 
     indicating the reasons for rejection of the fingerprints, and 
     instructions on what action, if any, the applicant must take;
       (C) the integrity of the naturalization examination is 
     maintained by ensuring that the examination is applied 
     consistently across the United States, that it adequately 
     tests knowledge of English and civics, and

[[Page S1445]]

     that the examination is not subject to fraud; and
       (D) Immigration and Naturalization Service offices are 
     provided with clear guidelines to ensure consistency among 
     offices of the Service in conducting naturalization 
     interviews, including the institution of a standard checklist 
     for the relevant components of the applicant's file, a 
     uniform worksheet for offices to use in determining 
     eligibility, and a list of examples of the offenses which 
     disqualify applicants for naturalization.
       (3) To maintain proper oversight of the naturalization 
     process, including--
       (A) development of national quality assurance procedures to 
     facilitate effective oversight of fingerprint procedures, 
     naturalization examination centers, and final Immigration and 
     Naturalization Service naturalization interviews;
       (B) accountability of field personnel involved in the 
     naturalization process to Immigration and Naturalization 
     Service headquarters;
       (C) outreach by national and local Immigration and 
     Naturalization Service naturalization offices to community 
     groups and State and local officials for the purpose of 
     encouraging qualified immigrants to seek United States 
     citizenship;
       (D) ensuring that applicants are treated fairly and 
     hospitably, and that a priority is given to customer service, 
     including increased customer service training for all 
     naturalization adjudication officers;
       (E) providing naturalization applicants with adequate 
     information on the naturalization process, procedure, and 
     approximate timetable for the entire naturalization process; 
     and
       (F) ensuring that Immigration and Naturalization Service 
     offices contain sufficient waiting areas with notices of 
     procedure and instructions in languages common to the 
     community served by the individual office.
       (4) To ensure that the naturalization process will be 
     continually updated as new innovations emerge, such as--
       (A) improved data sharing and digital fingerprint 
     technologies; and
       (B) establishment of a system for local Immigration and 
     Naturalization Service offices to share best practices 
     regarding the naturalization process, or ideas those offices 
     have to improve the process, and for incorporation of these 
     lessons into ongoing naturalization planning by the 
     Immigration and Naturalization Service.
       (c) Access for Individuals With Disabilities.--In 
     redesigning the naturalization process, the Attorney General 
     shall provide written guidance to the Immigration and 
     Naturalization Service officers and to applicants so that 
     individuals with disabilities are afforded reasonable 
     accommodations throughout the naturalization process, 
     including, but not limited to, access to Immigration and 
     Naturalization Service facilities, testing sites, and to the 
     English language and civics portions of the naturalization 
     examination.

     SEC. 6. DETERRING NATURALIZATION FRAUD.

       The Attorney General shall ensure that the naturalization 
     fingerprint submission process deters naturalization fraud 
     and maintains the integrity of the program by implementing 
     the following requirements:
       (1) Except in the case of law enforcement agencies 
     designated by the Immigration and Naturalization Service to 
     take fingerprints for naturalization applicants, fingerprint 
     cards shall be sent directly by the Immigration and 
     Naturalization Service, or its designee, to the Federal 
     Bureau of Investigation for processing, rather than returning 
     the fingerprint card to the applicant for submission.
       (2) Procuring the technology to institute electronic 
     fingerprint checks at all Immigration and Naturalization 
     Service offices by the fiscal year 2000.

     SEC. 7. ENSURING INELIGIBLE IMMIGRANTS ARE NOT NATURALIZED.

       (a) Criminal History Background Check.--The Immigration and 
     Naturalization Service shall ensure that a criminal history 
     background check with the Federal Bureau of Investigation is 
     completed for each naturalization applicant prior to the 
     naturalization interview, including requirements that--
       (1) all fingerprints shall be sent directly to the Federal 
     Bureau of Investigation as described in section 6;
       (2) prior to each naturalization interview, every 
     naturalization file shall contain documented evidence that a 
     criminal background check has been completed and the results 
     of any background check that indicates an applicant has a 
     Federal Bureau of Investigation record have been received;
       (3) the Federal Bureau of Investigation shall expeditiously 
     conduct a criminal history background check on each applicant 
     for naturalization, and shall provide a response describing 
     the applicant's criminal history as reflected in the Bureau's 
     records; and
       (4) where the applicant cannot provide legible 
     fingerprints, the Federal Bureau of Investigation shall 
     conduct a criminal history background check based on the 
     person's name and any other method of positive identification 
     used by the Federal Bureau of Investigation for criminal 
     history background checks.
       (b) Naturalization Interviews.--All naturalization 
     applicants, at the time of a standardized naturalization 
     examination or interview by an adjudications officer, shall 
     be required to demonstrate basic ability to speak and 
     understand words in ordinary usage in the English language, 
     in accordance with section 312(a)(1) of the Immigration and 
     Nationality Act, unless the applicant is exempt from the 
     requirements of that section pursuant to section 312(b) of 
     such Act, and at the time of interview, each adjudications 
     officer shall--
       (1) question each applicant about any arrest, charge, 
     conviction, or imprisonment which was revealed as a result of 
     the criminal history check;
       (2) determine whether any crime which the applicant reveals 
     he or she committed is one which would disqualify the 
     applicant from naturalization;
       (3) verify that the applicant was asked all mandatory 
     questions during the naturalization interview;
       (4) refer complex cases involving potentially disqualifying 
     crimes to a supervisory officer for review;
       (5) ensure that applicants are informed that they are not 
     United States citizens until they take the oath of 
     allegiance; and
       (6) provide each applicant with information on the legal 
     requirements which need to be fulfilled before such applicant 
     can register to vote.
       (c) Oath of Allegiance Requirements.--The Immigration and 
     Naturalization Service shall ensure that certificates of 
     citizenship are not to be distributed to naturalization 
     applicants prior to taking the oath of allegiance.

     SEC. 8. FUNDING AND FEES.

       (a) Availability of Funds.--Of the funds appropriated to 
     the Immigration and Naturalization Service for each of fiscal 
     years 1999, 2000, and 2001, $100,000,000 shall be made 
     available for backlog reduction, and technological and 
     infrastructure changes needed to ensure the appropriate 
     conduct of naturalization activities, including the purchase 
     of equipment for enhanced recordkeeping and fingerprint 
     checks, the development of testing centers, the conduct of 
     the pilot program described in section 4(a)(2), and other 
     purposes.
       (b) Limitation on Fees.--
       (1) In general.--The naturalization application fee charged 
     by the Immigration and Naturalization Service shall not 
     exceed $150 per applicant until the backlog of pending 
     naturalization applications has been substantially reduced in 
     each Immigration and Naturalization Service district.
       (2) Backlog; substantially reduced.--For purposes of this 
     section:
       (A) Backlog.--The term ``backlog'' means naturalization 
     applications which have been pending for longer than 6 months 
     from the time the application was submitted to the 
     Immigration and Naturalization Service.
       (B) Substantially reduced.--The backlog of pending 
     naturalization applications for a fiscal year shall be 
     considered to be ``substantially reduced'' if the number of 
     naturalization applications in the backlog in each 
     Immigration and Naturalization Service district at the end of 
     the fiscal year is at least 30 percent less than the number 
     of applications in the backlog in each district at the end of 
     the previous fiscal year.

     SEC. 9. DEFINITION.

       In this Act, the term ``Attorney General'' means the 
     Attorney General, acting through the Commissioner of 
     Immigration and Naturalization.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself and Mr. Dodd):
  S. 1718. A bill to amend the Weir Farm National Historic Site 
Establishment Act of 1990 to authorize the acquisition of additional 
acreage for the historic site to permit the development of visitor and 
administrative facilities and to authorize the appropriation of 
additional amounts for the acquisition of real and personal property; 
to the Committee on Energy and Natural Resources.


                  weir farm visitor center legislation

  Mr. LIEBERMAN. Mr. President, I rise today to join my friend Senator 
Dodd in introducing legislation that is vitally important to the future 
of Connecticut's only national park, the Weir Farm National Historic 
Site.

  As my colleagues may recall, Weir Farm was the home of the great 
American painter J. Alden Weir, who is widely considered a leader of 
the American Impressionism movement of the late 19th Century. The 
brilliant natural beauty of Weir Farm's landscape served as the 
inspiration for much of Weir's art as well as the work of several other 
renowned Impressionists who often traveled to the farm at the time. The 
splendor and serenity of this place also moved Weir's descendants and 
other artists who later made their home at the farm to preserve much of 
the landscape in the pristine state that originally inspired the many 
painters who visited there.
  Congress sought to protect this enormously valuable piece of our 
national heritage when it approved legislation that Senator Dodd and I 
cosponsored in 1990 to make Weir Farm part of the National Park System 
and the first site to honor an American painter. This legislation (P.L. 
101-485) authorized the Park Service to acquire 62

[[Page S1446]]

acres of the original Weir property along with several of the buildings 
that Weir lived and worked in and many of the original furnishings. The 
State of Connecticut strongly supported this project and helped make it 
possible by approving a $4.25 million bond issue to purchase the 60 
acres of open space surrounding the Weir homestead. The legislation was 
also strongly endorsed by a coalition of 20 leading national 
conservation groups, including The Nature Conservancy, which owns a 
large preserve of open land adjacent to the park property that further 
enhances the park's conservation mission.
  Today, thousands of visitors who make their way to Weir Farm each 
year can get lost in the tranquility of the place. They can tour the 
studio where Weir and his successors toiled and the classic New England 
barn that caught the eye of many visiting artists and that was 
rehabilitated with a generous appropriation from Congress. But 
something is missing--the art itself.
  Sadly, these visitors cannot view the wonderful collection of 
Impressionist works that the park managers and supporters are in the 
process of acquiring through private donations. That is because there 
is simply no place to put them on the current site. The cramped 
historic buildings are ill-equipped to accommodate even a legitimate 
visitor center, let alone a museum-quality gallery. And the possibility 
of building an addition has rightly been ruled out of the question 
because it would distort the landscape and run counter to the park's 
mission of preserving the historic character of the property.
  The legislation we are introducing today would help fill that void 
and help the park fulfill another critical part of its mission, which 
is to reunite Weir Farm's historic landscape with the rich array of art 
it inspired. Specifically, our bill would authorize the Park Service to 
go forward with its plan to acquire a neighboring property outside the 
park's boundary and build a full-fledged visitor center to house the 
collection of privately-acquired paintings from Weir, Childe Hassam, 
John Twachtman and several others. A companion version of this bill is 
being introduced in the House today as well by Congressman Jim Maloney, 
who represents the district in which the park is located.
  The Park Service approved this project as part of Weir Farm's long-
term General Management Plan. The Park Service has already identified 
an ideal 13-acre site to house the visitor center, as well as an 
adjacent administrative and maintenance facility that was also called 
for under the management plan. The owners of the targeted site are 
willing sellers and the Trust for Public Land--with a donation from the 
Weir Farm Trust, the park's private partner--has generously agreed to 
act as an intermediary in the purchase by putting an option on the 
property to prevent it from being developed.
  But for the project to go forward, Congress must first approve the 
acquisition and a one-time change in the park's boundary. Our 
legislation would do just that, providing the Park Service with the 
authority to acquire up to 15 additional acres and expand the park's 
boundary to include this new land. It would also raise the 
authorization for land acquisition included in the original Weir Farm 
legislation up from $1.5 million to $4 million.

  The Park Service estimates that the total cost of acquiring the 
property for the future visitor center will be $1.6 million. Of that 
total, it is expected that approximately $500,000 would come from 
unexpended land acquisition funds already appropriated by Congress and 
state and private contributions. That leaves a Federal contribution in 
the neighborhood of $1.1 million, which the Park Service has indicated 
it will request in its budget for fiscal year 2000. The projected cost 
of building the visitor center and the adjoining administrative/
maintenance facility is $4.7 million, of which approximately half would 
come from private sources and the other half would come from Federal 
funding through the Park Service.
  This project not only has the strong support of the Park Service and 
the State of Connecticut but of the communities surrounding Weir Farm, 
which straddles the town line between Wilton and Ridgefield. A number 
of residents in Ridgefield, where the visitor center would be built, 
initially expressed concern about the impact the project could have on 
the neighborhood. But the park managers and the leaders of the Weir 
Farm Trust worked diligently to address those concerns and show the 
community that the visitor center would in no way threaten the pastoral 
nature of the area or significantly worsen traffic along the 
neighborhood's narrow, windy roads.
  In fact, the friends of Weir Farm showed that this plan would 
actually enhance the conservation goals of the park and the community. 
It would prevent the historic character of the Weir property from being 
disturbed. And the proposed visitor center site would link the park to 
an additional 119 acres of contiguous open space owned by the state and 
the Town of Ridgefield. Also, an independent study showed that the 
proposed visitor center would not significantly impact the flow of 
traffic in the neighborhood, and the Park Service is confident that 
this plan provides the best long-term solution for managing 
transportation to the park site.
  In addition to reaching out to local residents, the park managers and 
the Ridgefield town government collaborated closely with my office and 
Senator Dodd's office to help us craft the bill we are introducing 
today in such a way as to ensure that the natural and historic 
character of the site would be preserved and to ensure the town 
maintained control over how the property was to be developed. As a 
result of these efforts, both the Ridgefield Planning and Zoning 
Commission and the Board of Selectmen formally approved this 
legislation late last year.
  This was not an easy process, and I want to express my deep 
appreciation to Weir Farm's superintendent, Sarah Olson, and to the 
town leaders in Ridgefield for their cooperation and their commitment 
to reach a resolution that is for the good of both the community and 
the park.
  The visitor center we're proposing to build will help Weir Farm 
realize its full potential not just as a pastoral prize but as a true 
cultural landmark, one that will likely attract art lovers from 
throughout the region and hopefully the nation to see Weir's jewel and 
its splendid setting.
  The alternative, Mr. President, is that if this project does not move 
forward, we will have squandered a wonderfully unique opportunity to 
make Weir Farm the only place of its kind to wed art and artistic 
vision in this way. The Ridgefield Press and The Wilton Bulletin, the 
leading local newspapers, urged us not to let this opportunity slip 
away in a joint editorial published last year that strongly endorsed 
the visitor center project. ``Bringing the art to Weir Farm,'' the 
editors wrote, ``has the potential to turn the site into something more 
than a retreat for artists and hikers--allowing an unusual cultural 
experience of considerable depth.''
  Senator Dodd and I would ask our colleagues to help us seize this 
important opportunity by supporting this legislation, which would 
complete the mission we started eight years ago when we agreed to make 
Weir Farm part of the park system.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1718

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

     SECTION 1. WEIR FARM NATIONAL HISTORIC SITE, CONNECTICUT.

       (a) Acquisition of Land for Visitor and Administrative 
     Facilities.--Section 4 of the Weir Farm National Historic 
     Site Establishment Act of 1990 (16 U.S.C. 461 note; Public 
     Law 101-485; 104 Stat. 1171) is amended by adding at the end 
     the following:
       ``(d) Acquisition of Land for Visitor and Administrative 
     Facilities; Limitations.--
       ``(1) Acquisition.--
       ``(A) In general.--To preserve and maintain the historic 
     setting and character of the historic site, the Secretary may 
     acquire not more than 15 additional acres for the development 
     of visitor and administrative facilities for the historic 
     site.
       ``(B) Proximity.--The property acquired under this 
     subsection shall be contiguous to or in close proximity to 
     the property described in subsection (b).
       ``(C) Management.--The acquired property shall be included 
     within the boundary of the historic site and shall be managed 
     and maintained as part of the historic site.
       ``(2) Development.--
       ``(A) In general.--The Secretary shall keep development of 
     the property acquired under paragraph (1) to a minimum so 
     that the character of the acquired property will

[[Page S1447]]

     be similar to the natural and undeveloped landscape of the 
     property described in subsection (b).
       ``(B) Parking area.--Any parking area for the resulting 
     visitor and administrative facility shall not exceed 30 
     spaces.
       ``(C) Sales.--Items sold in the visitor facilities--
       ``(i) shall be limited to educational and interpretive 
     materials related to the purpose of the historic site; and
       ``(ii) shall not include food.
       ``(3) Agreements.--Prior to and as a prerequisite to any 
     development of visitor and administrative facilities on the 
     property acquired under paragraph (1), the Secretary shall 
     enter into 1 or more agreements with the appropriate zoning 
     authority of the town of Ridgefield, Connecticut, and the 
     town of Wilton, Connecticut, for the purposes of--
       ``(A) developing the parking, visitor, and administrative 
     facilities for the historic site; and
       ``(B) managing bus traffic to the historic site and 
     limiting parking for large tour buses to an offsite 
     location.''.
       (b) Increase in Maximum Acquisition Authority.--Section 7 
     of the Weir Farm National Historic Site Act of 1990 (16 
     U.S.C. 461 note; Public Law 101-485; 104 Stat. 1173) is 
     amended by striking ``$1,500,000'' and inserting 
     ``$4,000,000''.

  Mr. DODD. Mr. President, today I join with Senator Lieberman in 
introducing legislation to add up to 15 acres to the Weir Farm National 
Historic Site in Connecticut for the creation of a visitor center and 
art gallery.
  The new property is located in Ridgefield, Connecticut. Because the 
land is adjacent to undeveloped State and Town land, the non-profit 
Weir Farm Heritage Trust can ensure that the proposed visitor center 
and gallery will be in keeping with the pastoral theme of the historic 
site.
  Eight years ago, Congress established Weir Farm as Connecticut's 
first national park and the only National Park Service site in the 
country dedicated to the celebration of an American painter. The 62 
acre historic site contains the home and studio of the founder of 
American impressionism, J. Alden Weir and this rich landscape is the 
inspiration for many of his paintings.
  Together, the National Park Service and the Weir Farm Heritage Trust 
seek to raise public awareness of the farm's historical and cultural 
significance and to preserve the farm's artistic tradition, while 
developing a world renown art collection and providing artist 
workshops. Through a Visiting Artists Program, several artists each 
year are invited to work within the surroundings of Weir Farm.
  More than eleven thousand people visited Weir Farm in 1996 and almost 
ten thousand came in 1997. The Park Service estimates that by the year 
2010, the number of visitors could increase to between 25,000-40,000. 
It is for these reasons that the Weir Farm Heritage Trust would like to 
acquire this land and convert an existing building into a visitor 
center and art gallery and construct a modest 30-space parking area. 
Language in the bill stipulates that the National Park Service will 
enter into a binding agreement with appropriate town zoning commissions 
to manage the projected increase in bus traffic and develop parking, 
visitor and administrative facilities.
  In December, the Ridgefield, Connecticut Selectmen voted in favor of 
the land acquisition proposal. In November, the Ridgefield Planning and 
Zoning commission also voted in favor of the plan, after convening 
several public hearings on the matter.
  This proposal is important to the people of Connecticut and all those 
who wish to see a bit of artistic history preserved in its natural 
state. I urge my colleagues to support this land acquisition proposal 
as well.
                                 ______
                                 
      By Mr. BAUCUS (for himself and Mr. Burns):
  S. 1719. A bill to direct the Secretary of Agriculture and the 
Secretary of the Interior to exchange land and other assets with Big 
Sky Lumber Co; to the Committee on Energy and Natural Resources.


                  the gallatin completion act of 1998

  Mr. BAUCUS. Mr. President, I rise today to announce the introduction 
of the Gallatin Land Consolidation Act of 1998. I am pleased to be 
joined in this introduction by my fellow members of the Montana 
delegation--Senator Burns and Congressman Hill. The Gallatin Act is a 
bipartisan bill that is the culmination of years of hard work and 
unheralded cooperation between the Montana delegation, local 
communities, conservation and user groups, and all levels of 
government.
  The consolidation of this area makes sense on many levels. In the 
Gallatin area, the Act will consolidate the historic checkerboard 
ownership that has muddied the waters of land management for years. 
This bill will establish logical and effective ownership and management 
of these lands. In the long run, consolidation will substantially 
reduce the cost to the Forest Service--and ultimately the taxpayer--of 
managing the Gallatin National Forest. By eliminating this checkerboard 
ownership pattern, the bill improves public access to Forest Service 
lands and reduces the disputes that currently arise over the proper 
location of property lines.
  Perhaps most importantly, this bill will protect these areas so that 
our children can enjoy them just as we do. The checkerboard ownership 
pattern invites sprawling subdivisions. Whether those occur across the 
Taylor Fork, or north in the Bangtails, the effect is the same. The 
Forest Service lands will be diminished in value for wildlife and 
recreation as every other section of land is developed. This 
checkerboard development would also diminish the pristine vistas that 
make this area so special. By consolidating these lands, we can protect 
recreational opportunities, wildlife herds, our famous fisheries, and 
the area's beautiful scenery.
  While consolidation benefits the entire Gallatin area, in the Taylor 
Fork alone, the benefits are awe-inspiring. This area is critical 
winter range for elk and moose and helps to sustain the largest 
contingent of grizzly bears in the lower forty-eight states. The 
conservation of the Taylor Fork, the Gallatin roaded area, and the 
Bangtails will allow for the continued historic uses that define the 
character of Montana such as hunting, grazing, recreation, and wildlife 
habitat protection.
  I would like to take a minute to thank the Montana delegation for 
their hard work that has led to introduction of this Act. I also want 
to recognize and applaud the efforts of all the folks in Montana who 
have been instrumental in crafting this consolidation.
  Local conservation and wildlife groups in Bozeman and in Butte have 
worked long and hard to ensure that this bill protects the fisheries 
and wildlife that make these lands unique. In response to their 
suggestions, we have crafted the bill to ensure that the public will be 
involved in planning the timber-for-land component of this exchange. In 
response to their suggestions, we have also provided for a fair and 
public process to determine the management direction for the acquired 
lands, and have included a restoration program to improve the 
environmental health of these lands. Together, these changes will 
ensure that these lands will be enjoyed by sportsmen and by all 
Montanans for generations to come.
  And I would like to thank those in the timber industry who have 
worked to ensure that this exchange will protect Montana mills. The 
Independent Forest Products Association, who represents many of 
Montana's small mills has been ever vigilant to ensure that the Forest 
Service small business provisions are respected. In that vein, I would 
especially like to thank Al Kington, whose last-minute advice allowed 
us to craft the bill to provide extra protection for Montana's small 
mills.
  I would also like to thank those who have worked so hard to ensure 
that the Taylor Fork is protected. The Rocky Mountain Elk Foundation 
has worked tirelessly to raise funds to purchase one of the sections in 
the Taylor Fork. Local land owners including the Kelsey's of the 9\1/4\ 
Circle Ranch and the Patton's of the Black Butte Ranch and the other 
members of the Upper Gallatin Community, helped with those efforts and 
have been vocal advocates for conserving these lands for all Montanans.
  I would also like to thank Gallatin County Commissioners Jane 
Jelinksi, Phil Olson and Bill Murdock. My staff met with the 
commissioners individually and as a group as we crafted this exchange. 
I appreciate their input and look forward to working with them in the 
future.
  Big Sky Lumber, the private party to this exchange has negotiated the 
terms of this agreement in good faith. They have provided a number of 
concessions to make this exchange more responsive to public concerns. 
These include

[[Page S1448]]

agreements to providing public recreation access across their lands, 
protecting viewsheds in the Bridger Canyon area, and providing options 
to local landowners to allow them to purchase some of these lands 
following the exchange.
  Last, but certainly not least, I would like to thank two public 
employees, Bob Dennee with the U.S. Forest Service, and Kurt Alt with 
the Montana Department of Fish, Wildlife and Parks. These two 
individuals have logged long hours on this exchange over the years and 
have been an invaluable resource for me and my staff.
  However, it should be clear to all that our work is not done. As the 
bill moves through the legislative process, I will continue working to 
make sure that this consolidation is responsive to the people that it 
serves. I look forward to working with the Montana public to finalize 
this exchange and to protect these important lands.
  Every once in a while, we are blessed to work on efforts for which we 
know our children will thank us. And the Gallatin Consolidation is one 
of those efforts. If we do not take this opportunity to address the 
problems that were created by the railroad land grants a century ago, 
we may never have another such opportunity. If we do not act now, these 
lands will be broken into smaller and smaller pieces--all to the 
detriment of our fish, wildlife, and cultural heritage. If we do not 
act now, it will be to the detriment of our children. However, if we 
succeed, our children and our grand children will be forever grateful.
  Mr. President, I encourage my colleagues to join me in supporting 
this important effort. And I thank my colleague from Montana for his 
continued hard work and cooperation on this bill.
  Mr. President. I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1719

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Gallatin Land Consolidation 
     Act of 1998''.

      SEC. 2. FINDINGS.

       Congress finds that--
       (1) the land north of Yellowstone National Park possesses 
     outstanding natural characteristics and wildlife habitats 
     that make the land a valuable addition to the National Forest 
     System;
       (2) it is in the interest of the United States to establish 
     a logical and effective ownership pattern for the Gallatin 
     National Forest, reducing long-term costs for taxpayers and 
     increasing and improving public access to the forest; and
       (3) it is in the interest of the United States for the 
     Secretary of Agriculture to enter into an Option Agreement 
     for the acquisition of land owned by Big Sky Lumber Co. to 
     accomplish the purposes of this Act.

      SEC. 3. DEFINITIONS.

       In this Act:
       (1) BLM land.--The term ``BLM land'' means approximately 
     3,000 acres of Bureau of Land Management land (including all 
     appurtenances to the land) that is proposed to be acquired by 
     BSL, as depicted in Exhibit B to the Option Agreement.
       (2) BSL.--The term ``BSL'' means Big Sky Lumber Co., an 
     Oregon joint venture, and its successors and assigns, and any 
     other entities having a property interest in the BSL land.
       (3) BSL land.--The term ``BSL land'' means approximately 
     55,000 acres of land (including all appurtenances to the 
     land) owned by BSL that is proposed to be acquired by the 
     Secretary of Agriculture, as depicted in Exhibit A to the 
     Option Agreement.
       (4) Forest system land.--The term ``Forest System land'' 
     means approximately 28,000 acres of land (including all 
     appurtenances to the land) owned by the United States in the 
     Gallatin National Forest, Flathead National Forest, Deer 
     Lodge National Forest, Lolo National Forest, and Lewis and 
     Clark National Forest that is proposed to be acquired by BSL, 
     as depicted in Exhibit B to the Option Agreement.
       (5) Option agreement.--The term ``Option Agreement'' means 
     the document signed by BSL, dated ____________ and entitled 
     ``Option Agreement for the Acquisition of Big Sky Lumber Co. 
     Lands Pursuant to the Gallatin Range Consolidation and 
     Protection Act of 1993'', and the exhibits (including an 
     exchange agreement) and maps attached to the agreement.

      SEC. 4. GALLATIN LAND CONSOLIDATION COMPLETION.

       (a) In General.--Notwithstanding any other provision of 
     law, if BSL offers title to the BSL land, including mineral 
     interests, that is acceptable to the United States and meets 
     the requirements of subsection (e)--
       (1) the Secretary of Agriculture shall accept a warranty 
     deed to the BSL land and a quit claim deed to the mineral 
     interests in the BSL land;
       (2) the Secretary of Agriculture shall convey to BSL, 
     subject to valid existing rights and to such other terms, 
     conditions, reservations, and exceptions as may be agreed on 
     by the Secretary of Agriculture and BSL fee title to the 
     Forest System land;
       (3) the Secretary shall grant to BSL timber harvest rights 
     to approximately 20,000,000 board feet of timber in 
     accordance with subsection (c) and as described in Exhibit C 
     to the Option Agreement;
       (4)(A) subject to the availability of funds, the Secretary 
     of Agriculture shall purchase the portion of the BSL land in 
     the Taylor Fork area depicted on Exhibit D to the Option 
     Agreement at a purchase price of not more than $6,500,000; 
     and
       (B) to extent that funds are not available, the Secretary 
     of Agriculture shall acquire the remaining Taylor Fork 
     sections through an exchange of assets; and
       (5) the Secretary of the Interior shall convey to BSL, by 
     patent or otherwise, subject to valid existing rights and to 
     such other terms, conditions, reservations, and exceptions as 
     may be agreed to by the Secretary of the Interior and BSL, 
     fee title to the BLM land.
       (b) Valuation.--The property and other assets exchanged by 
     BSL and the United States under subsection (a) shall be 
     approximately equal in value, as determined by the Secretary 
     of Agriculture.
       (c) Timber Harvest Rights.--
       (1) In general.--Not later than December 31 of the second 
     full calendar year that begins after the date of enactment of 
     this Act, the Secretary shall prepare, grant to BSL, and 
     commence administration of the timber harvest rights 
     identified in Exhibit C to the Option Agreement.
       (2) Grants.--
       (A) In general.--The Secretary shall grant timber harvest 
     rights to BSL not earlier than the date that is 45 days after 
     the date on which the Secretary issues a decision notice to 
     grant the timber harvest rights, or, if such a decision 
     notice is appealed, after the date of final resolution of the 
     appeal.
       (B) Limitation.--The Secretary may not grant timber harvest 
     rights that are the subject of administrative appeal or 
     litigation.
       (3) Administration.--After timber harvest rights are 
     granted to BSL, the decision notice for those rights and the 
     administration of those rights in accordance with the 
     decision notice shall not be subject to administrative appeal 
     or judicial review.
       (4) Schedules.--The Secretary and BSL shall mutually 
     develop and agree on schedules for the harvest of timber the 
     harvest rights to which are granted to BSL in the exchange.
       (5) Timber sale program.--The timber harvest rights granted 
     under this Act--
       (A) shall constitute the timber sale program for the 
     Gallatin National Forest for the period beginning on the date 
     of enactment of this Act and ending on December 31 of the 
     second full calendar year that begins after that date; and
       (B) shall be funded by the Secretary annually at levels 
     that are commensurate with the preparation and administration 
     involved in the program.
       (6) Substitution.--If circumstances, such as natural 
     catastrophe, administrative appeals or litigation, regulatory 
     or legal limitations, or environmental or financial 
     circumstances, prevent the Secretary from granting the timber 
     harvest rights identified in Exhibit C to the Option 
     Agreement, the Secretary shall replace the value of the 
     diminished timber harvest rights by substituting equivalent 
     timber harvest rights volume from the same market area.
       (7) Open market.--All timber harvest rights granted to BSL 
     in the exchange under subsection (a) shall be offered for 
     sale by BSL through the competitive bid process.
       (8) Small business.--All timber harvest rights granted to 
     BSL in the exchange shall be subject to compliance by BSL 
     with Forest Service small business program procedures in 
     effect as of the date of enactment of this Act, including 
     contractual provisions for payment schedules, harvest 
     schedules, and bonds and including the right of the highest 
     bidder among qualified small businesses that submit minimum 
     bids to be awarded a timber contract.
       (9) Compliance with option agreement.--The Secretary and 
     BSL shall comply with the terms and conditions of the Option 
     Agreement, including terms and conditions with respect to 
     timber harvest rights included in the exchange.
       (d) Rights-of-Way.--As part of the exchange under 
     subsection (a)--
       (1) the Secretary of Agriculture, under the authority of 
     the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1701 et seq.), shall convey to BSL such easements in or other 
     rights-of-way over Forest System land as may be agreed to by 
     the Secretary of Agriculture and BSL; and
       (2) BSL shall convey to the United States such easements in 
     or other rights-of-way over land owned by BSL as may be 
     agreed to by the Secretary of Agriculture and BSL.
       (e) Quality of Title.--
       (1) Determination.--The Secretary of Agriculture shall 
     review the title for the BSL land described in subsection (a) 
     and, within 45 days after receipt of all applicable title 
     documents from BSL, determine whether--
       (A) the applicable title standards for Federal land 
     acquisition have been satisfied or

[[Page S1449]]

     the quality of the title is otherwise acceptable to the 
     Secretary of Agriculture;
       (B) all draft conveyances and closing documents have been 
     received and approved;
       (C) a current title commitment verifying compliance with 
     applicable title standards has been issued to the Secretary; 
     and
       (D) the title includes both the surface and subsurface 
     estates without reservation or exception (except by the 
     United States or the State of Montana, by patent or as 
     otherwise agreed to by the Secretary and BSL), including--
       (i) minerals, mineral rights, and mineral interests 
     (including severed oil and gas surface rights), subject to 
     and excepting other outstanding or reserved oil and gas 
     rights;
       (ii) timber, timber rights, and timber interests, except 
     those reserved subject to section 251.14 of title 36, Code of 
     Federal Regulations, by BSL and agreed to by the Secretary;
       (iii) water, water rights, ditch, and ditch rights; and
       (iv) any other interest in the property.
       (2) Conveyance of title.--
       (A) In general.--If the quality of title does not meet 
     Federal standards or is otherwise determined to be 
     unacceptable to the Secretary of Agriculture, the Secretary 
     shall advise BSL regarding corrective actions necessary to 
     make an affirmative determination under paragraph (1).
       (B) Title to subsurface estate.--Title to the subsurface 
     estate shall be conveyed by BSL to the Secretary of 
     Agriculture in the same form and content as that estate is 
     received by BSL from Burlington Resources Oil & Gas Company 
     Inc. and Glacier Park Company.
       (f) Timing of Implementation.--
       (1) Land-for-land exchange.--The Secretary of Agriculture 
     shall accept the conveyance of land described in subsection 
     (a) not later than 45 days after the Secretary of Agriculture 
     has made an affirmative determination of quality of title.
       (2) Land-for-timber exchange.--The Secretary shall make the 
     timber harvest rights described in subsection (a)(3) 
     available not later than December 31 of the second full 
     calendar year that begins after the date of enactment of this 
     Act.
       (3) Purchase.--The Secretary of Agriculture shall complete 
     the purchase of BSL land under subsection (a)(4) not later 
     than 30 days after the date on which appropriated funds are 
     made available and an affirmative determination of quality of 
     title is made with respect to the BSL land.

     SEC. 5. GENERAL PROVISIONS.

       (a) Minor Corrections.--
       (1) In general.--The Option Agreement shall be subject to 
     such minor corrections as may be agreed to by the Secretary 
     of Agriculture and BSL.
       (2) Notification.--The Secretary shall notify the Committee 
     on Energy and Natural Resources of the Senate, the Committee 
     on Resources of the House of Representatives, and each member 
     of the Montana congressional delegation of any changes made 
     pursuant to this subsection.
       (b) Public Availability.--The Option Agreement--
       (1) shall be on file and available for public inspection in 
     the office of the Supervisor of the Gallatin National Forest; 
     and
       (2) shall be filed with the county clerk of each of 
     Gallatin County, Park County, Madison County, Granite County, 
     Broadwater County, Meagher County, Flathead County, and 
     Missoula County, Montana.
       (c) Status of Land.--All land conveyed to the United States 
     under this Act shall be added to and administered as part of 
     the Gallatin National Forest and Deerlodge National Forest, 
     as appropriate, in accordance with the Act of March 1, 1911 
     (commonly known as the ``Weeks Act'') (36 Stat. 961, chapter 
     186), and other laws (including regulations) pertaining to 
     the National Forest System.
       (d) Management.--
       (1) Public process.--Not later than 30 days after the date 
     of completion of the land-for-land exchange under section 
     4(f)(1), the Secretary shall initiate a public process to 
     amend the Gallatin National Forest Plan and the Deerlodge 
     National Forest Plan to integrate the acquired BSL land into 
     the plans.
       (2) Process time.--The amendment process under paragraph 
     (1) shall be completed not later than 360 days after the date 
     on which the amendment process is initiated.
       (3) Limitation.--An amended management plan shall not 
     permit surface occupancy on the BSL land for access to 
     reserved or outstanding oil and gas rights or for exploration 
     or development of oil and gas.
       (4) Interim management.--Pending completion of the forest 
     plan amendment process under paragraph (1), the Secretary 
     shall--
       (A) manage the acquired BSL land under the same standards, 
     guidelines, and management directions as adjacent land 
     managed by the Forest Service; and
       (B) maintain all existing public access to the acquired BSL 
     land.
       (e) Restoration.--
       (1) In general.--After acquiring the BSL land, the 
     Secretary shall implement a restoration program including 
     reforestation and watershed enhancements to bring the BSL 
     land and surrounding national forest land into compliance 
     with Forest Service standards and guidelines.
       (2) State and local conservation corps.--In implementing 
     the restoration program, the Secretary shall, when 
     practicable, use partnerships with State and local 
     conservation corps, including the Montana Conservation Corps, 
     under the Public Lands Corps Act of 1993 (16 U.S.C. 1721 et 
     seq.).
       (f) Implementation.--The Secretary of Agriculture shall 
     ensure that sufficient funds are made available to the 
     Gallatin National Forest to carry out this Act.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

  Mr. BURNS. Mr. President, I am pleased today to introduce with my 
colleague, Senator Baucus, the Gallatin Consolidation Act completion 
phase, know as Gallatin II (two). Our colleague, Congressman Hill, is 
introducing identical legislation today in the House.
  The bill we have jointly introduced today is the result of much 
cooperation and communication among the citizens of the state of 
Montana, the Forest Service, the partners of Big Sky Lumber and the 
Montana Congressional Delegation. Ranchers, property owners, 
outfitters, environmentalists, county commissioners, sportsmens groups, 
wildlife associations and other groups have sat at the table attempting 
to find consensus on the difficult aspects of the exchange.
  That process will continue. The introduction of this bill today does 
not end the public involvement. In fact, it just opens a different 
facet of public input. Committee hearings are next in line as we 
consider this legislation.
  The lands the U.S. Forest Service will acquire under this act are 
some of the richest wildlife habitat areas in the state of Montana. 
Today the lands in the Gallatin National Forest are still held in a 
mostly checkerboard land-ownership pattern. Add into this mix a 
dramatic increase in residential development in rural areas near the 
National Forests and you have further complicated the resource problems 
for multiple use in our National Forests.
  With this bill we are attempting to consolidate the National Forest 
System ownership pattern and preserve some of these corridors for 
wildlife, resource protection, and future generations who are fortunate 
enough to visit these forests.
  I want to thank my colleagues, Congressman Hill and Senator Baucus 
for their participation and cooperation in formulating a delegation 
approach to this complex land exchange. I look forward to moving this 
bill forward in an efficient and timely manner so that the deadline for 
accomplishing the exchange can be met.
  Thank you, Mr. President.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Leahy, and Mr. Kohl):
  S. 1720. A bill to amend title 17, United States Code, to reform the 
copyright law with respect to satellite retransmissions of broadcast 
signals, and for other purposes; to the Committee on the Judiciary.


        THE COPYRIGHT COMPULSORY LICENSE IMPROVEMENT ACT OF 1998

  Mr. HATCH. Mr. President, I rise to introduce a bill that will help 
provide for greater consumer choice and competition in television 
services, the Copyright Compulsory License Improvement Act of 1998. 
Joining me in introducing this bill are my colleagues Senators Leahy 
and Kohl.
  The options consumers have for viewing television entertainment have 
vastly increased since that fateful day in September 1927 when 
television inventor and Utah native Philo T. Farnsworth, together with 
his wife and colleagues, viewed the first television transmission in 
the Farnsworth's home workshop: a single black line rotated from 
vertical to horizontal. Both the forms of entertainment and the 
technologies for delivering that entertainment have proliferated over 
the 70 years since that day. In the 1940s and 50s, televisions began 
arriving in an increasing number of homes to pick up entertainment 
being broadcast into a growing number of cities and towns.
  In the late 60s and early 70s, cable television began offering 
communities more television choices by initially providing community 
antenna system of receiving broadcast television signals, and later by 
offering new created-for-cable entertainment. The development of cable 
television made dramatic strides with the enactment of the cable 
compulsory license in 1976, providing an efficient way of clearing 
copyright rights for the retransmission of broadcast signals over cable 
systems.

[[Page S1450]]

  In the 1980s, television viewers began to be able to receive 
television entertainment with their own home satellite equipment, and 
the enactment of the Satellite Home Viewer Act in 1988 helped develop a 
system of providing options for television service to Americans who 
lived in areas too remote to receive television signals over the air or 
via cable.
  Much has changed since the original Satellite Home Viewer Act was 
adopted in 1988. The Satellite Home Viewer Act was originally intended 
to ensure that households that could not get television in any other 
way, traditionally provided through broadcast or cable, would be able 
to get television signals via satellite. The market and the satellite 
industry has changed substantially since 1988. Many of the difficulties 
and controversies associated with the satellite license have been at 
least partly a product of the satellite business attempting to move 
from a predominately need-based rural niche service to a full service 
video delivery competitor in all markets, urban and rural.
  Now, many market advocates both in and out of Congress are looking to 
satellite carriers to compete directly with cable companies for 
viewership, because we believe that an increasingly competitive market 
is better for consumers both in terms of cost and the diversity of 
programming available. The bill I introduce today will move us toward 
that kind of robust competition.
  The bill I introduce today is focused on changes that we can make 
this year to move the satellite television industry to the next level, 
making it a full competitor in the multi-channel video delivery market. 
It has been said time and again that a major, and perhaps the biggest, 
impediment to satellite's ability to be a strong competitor to cable is 
its current inability to provide local broadcast signals. (See, e.g., 
Business Week (22 Dec. 1997) p. 84.) This problem has been partly 
technological and partly legal. Today, with this bill, we hope to begin 
removing the legal impediments to use of the emerging technology that 
will make local retransmission of broadcast signals a reality.
  This is a forward-looking bill which will create an incentive for 
companies to develop the means by which to provide local programming to 
local markets over satellite systems. In the next few years, if we make 
these legal changes, the satellite industry should be able to offer 
television viewers their own local programming of news, weather, 
sports, and entertainment, with digital quality picture and sound. This 
will mean that viewers in the remoter areas of my large home state of 
Utah will be able to watch television programming originating in Salt 
Lake City, rather than New York or California. Utahns in remote areas 
will have access to local weather and other locally and regionally 
relevant information. And, most important to all the constituents of my 
colleagues is that they will finally have a choice for full service 
multi-channel video programming: They will be able to choose cable or 
one of a number of satellite carriers. This should foster an 
environment of proliferating choice and lowered prices, all to the 
benefit of consumers, our constituents.
  To that end, the ``Copyright Compulsory License Improvement Act'' 
makes the following changes to the Satellite Home Viewers Act:
  It makes the satellite compulsory license permanent, just like the 
cable compulsory license. Under the current law the satellite license 
will sunset next year.
  It allows satellite carriers to retransmit a local television station 
to households within that station's local market, just like cable does, 
and sets a zero copyright rate for providing this service.
  It allows consumers to switch from cable to satellite service for 
network signals without the waiting period now required in the law.
  It reforms the current structure of the administrative body which 
determines rates and distributions applicable to all copyright 
compulsory licenses to make it more efficient and less expensive for 
the parties, as well as more technically expert.
  It creates substantial regulatory parity between the industries, 
including must-carry rules, retransmission consent requirements, 
network non-duplication, syndicated exclusivity, and sports blackout 
restrictions. These regulations will be phased in over a period of time 
in which the Federal Communications Commission can carefully consider 
and tailor their implementation. During that time, the portions of the 
satellite compulsory license which determine who is eligible to receive 
network and superstation signals from satellite carriers will continue 
to apply as they do now.
  Mr. President, this is a forward-looking bill that establishes the 
environment in which there can be more vigorous and fair competition in 
the video delivery market. But it is constructed to be practical in the 
realm of achievable legislation. Let me make clear that this bill is 
carefully balanced to ensure competition. It will do much to put the 
satellite industry on a more equal footing with its competitors and 
other market actors, both in terms of its benefits and 
responsibilities.
  Mr. President, let me briefly mention an issue that I think is 
important to touch on briefly at introduction. I am aware that there is 
currently controversy and even litigation over some issues relating to 
compliance with restrictions in the law as it is now written regarding 
satellite carriers providing network service. Let me make it clear that 
the introduction of this bill is but the beginning of a process. I 
would hope that this beginning is not interpreted by anyone as a 
license to disregard the law as it is now constituted in hopes of any 
future changes in the law. Our debates and discussions need to be fair 
and frank, and that process is not helped by abuse or disregard for 
current law. I would expect full compliance with and application of 
current law regarding the restrictions on eligibility for distant 
network signals or any other provisions in current law until such time 
as changes in the law are actually made.
  Having said that, I welcome and urge my colleagues and all interested 
parties to join in a constructive discussion of this very important 
legislation. I recognize that we may be able improve this bill before 
final passage, but I believe the essential balance of this bill is 
necessary to making it achievable now. I commend it to my colleagues 
for their consideration and look forward to working with them to help 
hasten more vigorous competition in the television delivery market and 
the ever-widening consumer choice that will follow it.
  I ask unanimous consent that the bill and an explanatory section-by-
section analysis be printed in the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:

                                S. 1720

       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 ``Copyright Compulsory License 
     Improvement Act''.

     SEC. 2. SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS.

       Section 119 of title 17, United States Code, is amended--
       (1) by amending the section heading to read as follows:

     ``Sec. 119. Limitations on exclusive rights: Secondary 
       transmissions by satellite carriers'';

     and
       (2) by striking subsection (a) and inserting the following:
       ``(a) Secondary Transmissions by Satellite Carriers for 
     Private Home Viewing.--
       ``(1) Secondary transmissions of distant and local 
     broadcast signals subject to statutory licensing.--Subject to 
     the provisions of subsections (b) and (c) of this section and 
     section 114(d), a secondary transmission of a primary 
     transmission made by a television broadcast station licensed 
     by the Federal Communications Commission or by the Public 
     Broadcasting Service satellite feed and embodying a 
     performance or display of a work shall be subject to 
     statutory licensing under this section if--
       ``(A) the secondary transmission is permissible under the 
     rules, regulations, and authorizations of the Federal 
     Communications Commission and is made by a satellite carrier 
     to the public for private home viewing; and
       ``(B) the carrier makes a direct or indirect charge for 
     each retransmission service to each household receiving the 
     secondary transmission or to a distributor that has 
     contracted with the carrier for direct or indirect delivery 
     of the secondary transmission to the public for private home 
     viewing.
       ``(2) Submission of subscriber lists to television 
     broadcast stations.--
       ``(A) Initial lists.--A satellite carrier that makes 
     secondary transmissions of a primary

[[Page S1451]]

     transmission of a television broadcast station pursuant to 
     paragraph (1) shall, within 90 days after commencing such 
     secondary transmissions, submit to that television broadcast 
     station--
       ``(i) a list identifying all subscribers within the 
     designated market area of that television broadcast station 
     to whom the satellite carrier has made such secondary 
     transmissions; and
       ``(ii) a list of all television broadcast stations whose 
     primary transmissions have been transmitted by the satellite 
     carrier to those subscribers during that 90-day period.
       ``(B) Subsequent lists.--After the submission of the lists 
     under subparagraph (A), the satellite carrier shall, on the 
     15th day of each month, submit to each television broadcast 
     station--
       ``(i) a list, which shall be dated, that identifies the 
     name of any subscriber described in subparagraph (A) who has 
     been added or dropped since the last submission under this 
     paragraph; and
       ``(ii) a list of all television broadcast stations whose 
     primary transmissions have been added or dropped by the 
     satellite carrier since the last submission under this 
     paragraph
       ``(C) Identifying information.--(i) Each list of 
     subscribers under this paragraph shall include the name of 
     each subscriber, together with the subscriber's home address, 
     which shall include the street address or rural route as the 
     case may be, city, county, State, and zip code and, if 
     different from the subscriber's home address, the location of 
     the subscriber's satellite receiving dish to which the 
     secondary transmissions are made, identified by street 
     address or rural route as the case may be, city, county, 
     State, and zip code.
       ``(ii) Each list of television broadcast stations under 
     this paragraph shall include the station's call letters and 
     community of license.
       ``(iii) Subscriber information submitted under this 
     paragraph may be used only for purposes of monitoring 
     compliance by the satellite carrier with this section.
       ``(3) Penalties for noncompliance with accounting and 
     royalty requirements.--Notwithstanding the provisions of 
     paragraph (1), the willful or repeated secondary transmission 
     to the public by a satellite carrier of a primary 
     transmission made by a television broadcast station licensed 
     by the Federal Communications Commission or by the Public 
     Broadcasting Service satellite feed and embodying a 
     performance or display of a work is actionable as an act of 
     infringement under section 501, and is fully subject to the 
     remedies provided by sections 502 through 506 and 509, if the 
     satellite carrier has not deposited the statement of account 
     and royalties fees required by subsection (b), or has failed 
     to make the submissions to networks required by paragraph 
     (2).
       ``(4) Penalties for willful alterations of programming.--
     Notwithstanding the provisions of paragraph (1), the 
     secondary transmission to the public by a satellite carrier 
     of a primary transmission made by a television broadcast 
     station licensed by the Federal Communications Commission or 
     by the Public Broadcasting Service satellite feed and 
     embodying a performance or display of a work is actionable as 
     an act of infringement under section 501, and is fully 
     subject to the remedies provided by section 502 through 506 
     and sections 509 and 510, if the content of the particular 
     program in which the performance or display is embodied, or 
     any commercial advertising or station announcement 
     transmitted by the primary transmitter during, or immediately 
     before or after, the transmission of such program, is in any 
     way willfully altered by the satellite carrier through 
     changes, deletions, or additions, or is combined with 
     programming from any other broadcast signal.
       ``(5) Penalties for discrimination against distributor.--
     Notwithstanding the provisions of paragraph (1), the willful 
     or repeated secondary transmission to the public by a 
     satellite carrier of a primary transmission made by a 
     television broadcast station licensed by the Federal 
     Communications Commission or by the Public Broadcasting 
     Service satellite feed and embodying the performance or 
     display of a work is actionable as an act of infringement 
     under section 501, and is fully subject to the remedies 
     provided by sections 502 through 506 and 509, if the 
     satellite carrier unlawfully discriminates against a 
     distributor.
       ``(6) License limited to secondary transmissions to 
     households in the United States.--The statutory license 
     created by this section shall apply only to secondary 
     transmissions to households located in the United States.''.

     SEC. 3. STATUTORY LICENSE FOR SATELLITE CARRIERS.

       Section 119 of title 17, United States Code, is amended by 
     striking subsection (b) and inserting the following:
       ``(b) Statutory License for Secondary Transmissions for 
     Private Home Viewing.--
       ``(1) Deposit of accounts and fees with register of 
     copyrights.--A satellite carrier whose secondary 
     transmissions are subject to statutory licensing under 
     subsection (a) shall, on a semiannual basis, deposit with the 
     Register of Copyrights, in accordance with requirements that 
     the Register shall prescribe by regulation--
       ``(A) a statement of account, covering the preceding 6-
     month period, specifying the names and locations of all 
     television broadcast stations whose signals were 
     retransmitted, and listing the Public Broadcasting Service 
     satellite feed, if carried, at any time during that period, 
     to subscribers for private home viewing, the total number of 
     subscribers that received such retransmissions, and other 
     such data as the Register of Copyrights may from time to time 
     prescribe by regulation; and
       ``(B) a royalty fee for that 6-month period for each 
     television broadcast station whose primary transmission was 
     retransmitted beyond the local market of the station, and for 
     the Public Broadcasting Service satellite feed, if carried, 
     computed by multiplying the total number of subscribers 
     receiving the secondary transmission, and the number of 
     subscribers receiving a secondary transmission of the Public 
     Broadcasting Service satellite feed, during each calendar 
     month by the rate in effect for television broadcast stations 
     as determined under chapter 8 of this title and section 8(c) 
     of the Copyright Compulsory License Improvement Act.
       ``(2) Investment of fees.--The Register of Copyrights shall 
     receive all fees deposited under this section and, after 
     deducting the reasonable costs incurred by the Copyright 
     Office under this section (other than the costs deducted 
     under paragraph (4)), shall deposit the balance in the 
     Treasury of the United States, in such manner as the 
     Secretary of the Treasury directs. All funds held by the 
     Secretary of the Treasury shall be invested in interest-
     bearing securities of the United States for later 
     distribution with interest by the Copyright Royalty 
     Adjudication Board as provided in this title. The Register 
     may, four or more years after the close of any calendar year, 
     close out the account for royalty payments made under this 
     section for that calendar year (including payments made under 
     this section as in effect before the effective date of the 
     Copyright Compulsory License Improvement Act), and may treat 
     any funds remaining in such account and any subsequent 
     deposits that would otherwise be attributable to that 
     calendar year as attributable to the calendar year in which 
     the account is closed.
       ``(3) Persons to whom fees are distributed.--The royalty 
     fees deposited under paragraph (2) shall, in accordance with 
     the procedures provided in paragraph (4), be distributed to 
     those copyright owners whose works were included in a 
     secondary transmission for private home viewing made by a 
     satellite carrier during the applicable 6-month accounting 
     period and who file a claim with the Board under paragraph 
     (4).
       ``(4) Procedures for distribution.--The royalty fees 
     deposited under paragraph (2) shall be distributed in 
     accordance with the following procedures:
       ``(A) Filing of claims for fees.--During the month of July 
     in each year, each person claiming to be entitled to 
     statutory license fees for secondary transmissions for 
     private home viewing shall file a claim with the Copyright 
     Royalty Adjudication Board, in accordance with requirements 
     that the Board shall prescribe by regulation. For purposes of 
     this paragraph, any claimants may agree among themselves as 
     to the proportionate division of statutory license fees among 
     them, may lump their claims together and file them jointly or 
     as a single claim, or may designate a common agent to receive 
     payment on their behalf.
       ``(B) Determination of controversy; distributions.--After 
     the first day of August of each year, the Copyright Royalty 
     Adjudication Board shall determine whether there exists a 
     controversy concerning the distribution of royalty fees. If 
     the Board determines that no such controversy exists, the 
     Board shall, after deducting reasonable administrative costs 
     under this paragraph, distribute such fees to the copyright 
     owners entitled to receive them, or to their designated 
     agents. If the Board finds the existence of a controversy, 
     the Board shall, pursuant to chapter 8 of this title, conduct 
     a proceeding to determine the distribution of royalty fees.
       ``(C) Withholding of fees during controversy.--During the 
     pendency of any proceeding under this subsection, the 
     Copyright Royalty Adjudication Board shall withhold from 
     distribution an amount sufficient to satisfy all claims with 
     respect to which a controversy exists, but shall have 
     discretion to proceed to distribute any amounts that are not 
     in controversy. The action of the Board to distribute royalty 
     fees may precede the declaration of a controversy if all 
     parties to the proceeding file a petition with the Board 
     requesting such distribution, except that such amount may not 
     exceed 50 percent of the amounts on hand at the time of the 
     request.''.

     SEC. 4. DEFINITIONS.

       Section 119 of title 17, United States Code, is amended by 
     striking subsection (d) and inserting the following:
       ``(d) Definitions.--As used in this section--
       ``(1) Designated market area.--The term `designated market 
     area' has the meaning given that term in section 337(g) of 
     the Communications Act of 1934.
       ``(2) Distributor.--The term `distributor' means an entity 
     which contracts to distribute secondary transmissions from a 
     satellite carrier and, either as a single channel or in a 
     package with other programming, provides the secondary 
     transmission either directly to individual subscribers for 
     private home viewing or indirectly through other program 
     distribution entities.
       ``(3) Local market.--The `local market' for a television 
     broadcast station has the meaning given that term in section 
     337(g) of the Communications Act of 1934.

[[Page S1452]]

       ``(4) Primary transmission.--The term `primary 
     transmission' has the meaning given that term in section 
     111(f) of this title.
       ``(5) Private home viewing.--The term `private home 
     viewing' means the viewing, for private use in a household by 
     means of satellite reception equipment which is operated by 
     an individual in that household and which serves only such 
     household, of a secondary transmission delivered by a 
     satellite carrier of a primary transmission of a television 
     station licensed by the Federal Communications Commission or 
     of the Public Broadcasting Service satellite feed.
       ``(6) Public broadcasting service satellite feed.--The term 
     `Public Broadcasting Service satellite feed' means the 
     national satellite feed distributed by the Public 
     Broadcasting Service (other than the transmissions that may 
     not be encrypted under section 705(c) of the Communications 
     Act of 1934), consisting of educational and informational 
     programming intended for private home viewing, to which the 
     Public Broadcasting Service holds national terrestrial 
     broadcast rights.
       ``(7) Satellite carrier.--The term `satellite carrier' 
     means an entity that uses the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission, and operates in the Fixed-Satellite Service under 
     part 25 of title 47, Code of Federal Regulations (as in 
     effect on February 1, 1998), or the Direct Broadcast 
     Satellite Service under part 100 of title 47, Code of Federal 
     Regulations (as in effect on February 1, 1998), to establish 
     and operate a channel of communications for point-to-
     multipoint distribution of television station signals, and 
     that owns or leases a capacity or service on a satellite in 
     order to provide such point-to-multipoint distribution, 
     except to the extent that such entity provides such 
     distribution pursuant to tariff under the Communications Act 
     of 1934, other than for private home viewing.
       ``(8) Secondary transmission.--The term `secondary 
     transmission' means the further transmitting of a primary 
     transmission simultaneously with the primary transmission.
       ``(9) Subscriber.--The term `subscriber' means an 
     individual who receives a secondary transmission service for 
     private home viewing by means of a secondary transmission 
     from a satellite carrier and pays a fee for the service, 
     directly or indirectly, to the satellite carrier or to a 
     distributor.
       ``(10) Television broadcast station.--The term `television 
     broadcast station' means an over-the-air, commercial or 
     noncommercial television broadcast station licensed by the 
     Federal Communications Commission under subpart E of part 73 
     of title 47, Code of Federal Regulations.''.

     SEC. 5. EXCLUSIVITY OF SECTION 119 OF TITLE 17, UNITED STATES 
                   CODE.

       Section 119 of title 17, United States Code, is amended by 
     adding at the end the following:
       ``(e) Exclusivity for This Section With Respect to 
     Secondary Transmissions of Television Stations by Satellite 
     to Members of the Public.--No provision of section 111 of 
     this title or any other law (other than this section) shall 
     be construed to contain any authorization, exemption, or 
     license through which secondary transmissions by satellite 
     carriers for private home viewing of programming contained in 
     a primary transmission may be made without obtaining the 
     consent of the copyright owner.''.

     SEC. 6. CONFORMING AMENDMENT.

       The table of contents for chapter 1 of title 17, United 
     States Code, is amended by striking the item relating to 
     section 119 and inserting the following:

``119. Limitations on exclusive rights: Secondary transmissions by 
              satellite carriers.''.

     SEC. 7. COPYRIGHT ROYALTY ADJUDICATION BOARD.

       (a) Establishment and Functions.--Chapter 8 of title 17, 
     United States Code, is amended to read as follows:

           ``CHAPTER 8--COPYRIGHT ROYALTY ADJUDICATION BOARD

``Sec.
``801. Copyright Royalty Adjudication Board: establishment.
``802. Membership and qualifications of the Board.
``803. Selection of administrative copyright judges.
``804. Independence of the Board.
``805. Removal and sanction of administrative copyright judges.
``806. Functions.
``807. Factors for determining royalty fees.
``808. Institution of proceedings.
``809. Conduct of proceedings.
``810. Judicial review.
``811. Administrative matters.
``812. Rule of construction.

     ``Sec. 801. Copyright Royalty Adjudication Board: 
       establishment

       ``There is hereby established within the Copyright Office 
     the Copyright Royalty Adjudication Board (hereinafter 
     referred to in this chapter as the `Board').

     ``Sec. 802. Membership and qualifications of the Board

       ``(a) Membership.--
       ``(1) In general.--The Board shall consist of 1 full-time 
     chief administrative copyright judge, and such part-time 
     administrative copyright judges as the Librarian of Congress, 
     upon the recommendation of the Register of Copyrights, finds 
     necessary to conduct the business of the Board in a timely 
     manner. At no time shall the number of authorized 
     administrative copyright judges be less than 3 or more than 
     5.
       ``(2) Part-time administrative copyright judges.--Chapter 
     34 of title 5 shall not apply to a part-time administrative 
     copyright judge. For purposes of this subsection the 
     Librarian of Congress shall promulgate regulations relating 
     to part-time employment of administrative copyright judges.
       ``(b) Qualifications.--
       ``(1) Chief administrative copyright judge.--The chief 
     administrative copyright judge shall be an attorney with 10 
     or more years of legal practice with demonstrated experience 
     in administrative hearings or court trials and demonstrated 
     knowledge of copyright law.
       ``(2) Other administrative copyright judges.--Each 
     administrative copyright judge, other than the chief 
     administrative copyright judge, shall be an individual with 
     expertise in the business and economics of industries 
     affected by the actions taken by the Board to carry out its 
     functions.
       ``(c) Terms.--(1) The term of each administrative copyright 
     judge (including the chief administrative copyright judge) 
     shall be 5 years, except that, of the first administrative 
     copyright judges appointed, the Librarian of Congress, upon 
     the recommendation of the Register of Copyrights, shall 
     appoint all but one of them to lesser terms to establish a 
     staggering of terms such that in any calendar year no more 
     than one term is due to expire.
       ``(2) The term of each administrative copyright judge 
     (including the chief administrative copyright judge) shall 
     begin when the term of the predecessor of that member ends. 
     An individual appointed to fill the vacancy occurring before 
     the expiration of the term for which the predecessor of that 
     individual was appointed shall be appointed for the remainder 
     of that term. When the term of office of a member ends, the 
     member may continue to serve until a successor is selected.
       ``(d) Compensation.--The compensation of the administrative 
     copyright judges shall be governed solely by the provisions 
     of section 5376 of title 5 and such regulations as the 
     Librarian of Congress may adopt that are not inconsistent 
     with that section. The compensation of the administrative 
     copyright judges shall not be subject to any regulations 
     adopted by the Office of Personnel Management pursuant to its 
     authority under section 5376(b)(1) of title 5.

     ``Sec. 803. Selection of administrative copyright judges

       ``(a) Selection.--(1) The Librarian of Congress, upon the 
     recommendation of the Register of Copyrights, shall select 
     the administrative copyright judges (including the chief 
     administrative copyright judge) among individuals found 
     qualified under section 802(b) who meet the financial 
     conflict of interest under section 805(a). Notwithstanding 
     any other provision of law and at the discretion of the 
     Librarian, the Librarian shall determine the method of 
     selecting the members.
       ``(2) Administrative copyright judges previously selected 
     by the Librarian of Congress may be selected to serve 
     additional terms. There shall be no limit on the number of 
     terms any individual may serve.
       ``(b) Effect of Vacancy.--In no event shall a vacancy in 
     the Board impair the right of the remaining administrative 
     copyright judges to exercise all of the powers of the Board.

     ``Sec. 804. Independence of the Board

       ``(a) In General.--The Board shall have independence in 
     reaching its determinations concerning the adjustment of 
     copyright royalty rates, the distribution of copyright 
     royalties, the acceptance or rejection of royalty claims and 
     rate adjustment petitions, and such rulemaking functions as 
     are delegated to it under this title.
       ``(b) Performance Appraisals.--Notwithstanding any other 
     provision of law or any regulation of the Library of 
     Congress, no administrative copyright judge shall receive an 
     annual performance appraisal.
       ``(c) Inconsistent Duties Barred.--No administrative 
     copyright judge may be assigned duties inconsistent with his 
     or her duties and responsibilities as a administrative 
     copyright judge.

     ``Sec. 805. Removal and sanction of administrative copyright 
       judges

       ``(a) Standards of Conduct.--The Librarian of Congress, 
     upon the recommendation of the Register of Copyrights, shall 
     adopt regulations regarding the standards of conduct, 
     including financial conflict of interest and restrictions 
     against ex parte communications, which shall govern the 
     administrative copyright judges and the proceedings under 
     this chapter.
       ``(b) Removal or Sanction.--The Librarian of Congress, upon 
     the recommendation of the Register of Copyrights, may remove 
     or sanction an administrative copyright judge for violation 
     of the standards of conduct adopted under subsection (a), 
     misconduct, neglect of duty, or any disqualifying physical or 
     mental disability. Any such removal or sanction may be made 
     only after notice and opportunity for hearing, but the 
     Librarian of Congress, upon the recommendation of the 
     Register of Copyrights, may suspend the administrative 
     copyright judge during the pendency of such hearing.

     ``Sec. 806. Functions

       ``Subject to the provisions of this chapter, the functions 
     of the Board shall be--
       ``(1) to make determinations concerning the adjustment of 
     reasonable copyright royalty rates for--

[[Page S1453]]

       ``(A) secondary transmissions to the public by a cable 
     system of a primary transmission as provided in section 111;
       ``(B) the making and distributing of phonorecords by means 
     other than digital phonorecord delivery, as provided in 
     section 115;
       ``(C) secondary transmissions to the public by a satellite 
     carrier of a primary transmission made by a television 
     broadcast station and the Public Broadcasting Service 
     satellite feed as provided in section 119; and
       ``(D) each digital audio recording device imported into and 
     distributed in the United States or manufactured and 
     distributed into the United States as provided in section 
     1004;
       ``(2) to make determinations as to reasonable rates and 
     terms of royalty payments for--
       ``(A) the public performance of a sound recording by means 
     of a digital audio transmission as provided in section 114;
       ``(B) the making and distribution of phonorecords by means 
     of a digital phonorecord delivery as provided in section 115;
       ``(C) the public performance of nondramatic musical works 
     by means of coin-operated phonorecord players as provided in 
     section 116; and
       ``(D) the use of nondramatic musical works and pictorial, 
     graphic, and sculptural works by public broadcasting entities 
     as provided in section 118;
       ``(3) to accept or reject royalty claims filed under 
     sections 111, 119, and 1007, on the basis of timeliness or 
     the failure to establish the basis for a claim;
       ``(4) to determine, in cases where controversy exists, the 
     distribution of royalty fees deposited with the Register of 
     Copyrights under sections 111, 119, and 1003;
       ``(5) to determine the status of a digital audio recording 
     device or a digital audio interface device under sections 
     1002 and 1003, as provided in section 1010; and
       ``(6) to engage in such rulemaking as is expressly provided 
     in sections 111, 114, 115, 118, and 119.

     ``Sec. 807. Factors for determining royalty fees

       ``(a) For Cable Rates.--The rates applicable under section 
     111 shall be calculated solely in accordance with the 
     following provisions:
       ``(1) The rates established by section 111(d)(1)(B) may be 
     adjusted to reflect--
       ``(A) national monetary inflation or deflation, or
       ``(B) changes in the average rates charged cable 
     subscribers for the basic service of providing secondary 
     transmissions to maintain the real constant dollar level of 
     the royalty fee per subscriber which existed as of October 
     19, 1976, except that--
       ``(i) if the average rates charged cable system subscribers 
     for the basic service of providing secondary transmissions 
     are changed so that the average rates exceed national 
     monetary inflation, no change in the rates established by 
     section 111(d)(1)(B) shall be permitted; and

       ``(ii) no increase in the royalty fee shall be permitted 
     based on any reduction in the average number of distant 
     signal equivalents per subscriber.

     The Board may consider all factors relating to the 
     maintenance of such level of payments including, as an 
     extenuating factor, whether the cable industry has been 
     restrained by subscriber rate regulating authorities from 
     increasing the rates for the basic service of providing 
     secondary transmissions.
       ``(2) In the event that the rules and regulations of the 
     Federal Communications Commission are amended at any time 
     after April 15, 1976, to permit the carriage by cable systems 
     of additional television broadcasting signals beyond the 
     local service area of the primary transmitters of such 
     signals, the royalty rates established by section 
     111(d)(1)(B) may be adjusted to insure that the rates for the 
     additional distant signal equivalents resulting from such 
     carriage are reasonable in light of the changes effected by 
     the amendment to such rules and regulations. In determining 
     the reasonableness of rates proposed following an amendment 
     of Federal Communications Commission rules and regulations, 
     the Board shall consider, among other factors, the economic 
     impact on copyright owners and users, except that no 
     adjustment in royalty rates shall be made under this 
     paragraph with respect to any distant signal equivalent or 
     fraction thereof represented by--
       ``(A) carriage of any signal permitted under the rules and 
     regulations of the Federal Communications Commission in 
     effect on April 15, 1976, or the carriage of a signal of the 
     same type (that is, independent, network, or noncommercial 
     educational) substituted for such permitted signal, or
       ``(B) a television broadcast signal first carried after 
     April 15 1976, pursuant to an individual waiver of the rules 
     and regulations of the Federal Communications Commission, as 
     such rules and regulations were in effect on April 15, 1976.
       ``(3) In the event of any change in the rules and 
     regulations of the Federal Communications Commission with 
     respect to syndicated and sport program exclusivity after 
     April 15, 1976, the rates established by section 111(d)(1)(B) 
     may be adjusted to assure that such rates are reasonable in 
     light of the changes to such rules and regulations, but any 
     such adjustment shall apply only to the affected television 
     broadcast signals carried on those systems affected by the 
     change.
       ``(4) The gross receipts limitations established by section 
     111(d)(1)(C) and (D) shall be adjusted to reflect national 
     monetary inflation or deflation or changes in the average 
     rates charged cable system subscribers for the basic service 
     of providing secondary transmissions to maintain the real 
     constant dollar value of the exemption provided by such 
     section, and the royalty rate specified therein shall not be 
     subject to adjustment.
       ``(b) For Rates Other Than Cable or Satellite Carriers.--
     The rates applicable under sections 114, 115, and 116 shall 
     be calculated to achieve the following objectives:
       ``(1) To maximize the availability of creative works to the 
     public.
       ``(2) To afford the copyright owner a fair return for his 
     or her creative work and the copyright user a fair income 
     under existing economic conditions.
       ``(3) To reflect the relative roles of the copyright owner 
     and the copyright user in the product made available to the 
     public with respect to relative creative contribution, 
     technological contribution, capital investment, cost, risk, 
     and contribution to the opening of new markets for creative 
     expression and media for their communications.
       ``(4) To minimize any disruptive impact on the structure of 
     the industries involved and on generally prevailing industry 
     practices.
       ``(c) For Rates for Noncommercial Broadcasting.--The rates 
     applicable under section 118 shall be calculated to achieve 
     reasonable rates. In determining reasonable rates, the Board 
     shall base its decision so as to--
       ``(1) assure a fair return to copyright owners;
       ``(2) encourage the growth and development of public 
     broadcasting; and
       ``(3) encourage musical and artistic creation.
       ``(d) Rates for Satellite Carriers.--The rates applicable 
     under section 119 shall be calculated to represent most 
     clearly the fair market value of secondary transmissions. In 
     determining the fair market value, the Board shall base its 
     decision on economic, competitive, and programming 
     information presented by the parties, including--
       ``(1) the competitive environment in which such programming 
     is distributed, the cost for similar signals in similar 
     private and compulsory license marketplaces, and any special 
     features and conditions of the retransmission marketplace;
       ``(2) the economic impact of such fees on copyright owners 
     and satellite carriers; and
       ``(3) the impact on the continued availability of secondary 
     transmissions to the public.

     ``Sec. 808. Institution of proceedings

       ``(a) Petition Required To Institute Proceedings.--With 
     respect to proceedings concerning the adjustment of royalty 
     rates as provided in sections 111, 114, 115, 116, and 119, 
     during the calendar years or under the circumstances 
     specified in the schedule set forth in subsection (c), any 
     owner or user of a copyrighted work whose royalty rates are 
     to be established or adjusted by the Board may file a 
     petition with the Board declaring that the petitioner 
     requests an adjustment of the rate. The Board shall make a 
     determination as to whether the petitioner has a significant 
     interest in the royalty rate in which an adjustment is 
     requested. If the Board determines that the petitioner has a 
     significant interest, the Board shall cause notice of this 
     determination, with the reasons therefor, to be published in 
     the Federal Register, together with the notice of 
     commencement of proceedings under this chapter. With respect 
     to proceedings concerning the adjustment of royalty rates 
     under section 1004, any interested copyright party may 
     petition the Board as provided in that section.
       ``(b) Petition Not Required To Institute Proceedings.--With 
     respect to proceedings concerning the adjustment of royalty 
     rates as provided in section 118 and the distribution of 
     royalties as provided in section 111, 119, and 1007, no 
     petition is required to institute proceedings. All 
     proceedings concerning the adjustment of rates under section 
     118 shall commence as provided in section 118(c) of this 
     title. All proceedings concerning the distribution of 
     royalties under section 111, 119, or 1007 shall commence as 
     provided in such sections and in subsection (c)(8) of this 
     section.
       ``(c) Schedule of Proceedings.--
       ``(1) Section 111 proceedings.--In proceedings concerning 
     the adjustment of royalty rates as provided in section 111, a 
     petition described in subsection (a) may be filed during the 
     year 2000 and in each subsequent fifth calendar year, except 
     that in the event that the rules and regulations of the 
     Federal Communications Commission are amended with respect to 
     distant signal importation, or to syndicated and sports 
     program exclusivity, any owner or user of a copyrighted work 
     subject to the royalty rates established or adjusted pursuant 
     to section 111 may, within 12 months after such amendments 
     take effect, file a petition with the Board to institute 
     proceedings to insure that the rates are reasonable in light 
     of the changes to such rules and regulations. Any such 
     adjustments shall apply only to the affected television 
     broadcast signals carried on those systems affected by the 
     change. Any change in royalty rates made pursuant to this 
     subsection may be reconsidered in the year 2000, and each 
     fifth calendar year thereafter, as the case may be.
       ``(2) Section 114 proceedings.--In proceedings concerning 
     the adjustment of royalty rates and terms as provided in 
     section 114, the Board shall proceed when and as provided by 
     that section.

[[Page S1454]]

       ``(3) Section 115 proceedings.--In proceedings concerning 
     the adjustment of royalty rates and terms as provided in 
     section 115, a petition described in subsection (a) may be 
     filed in the year 2007 and in each subsequent tenth calendar 
     year or as prescribed in section 115(c)(3).
       ``(4) Section 116 proceedings.--(A) In proceedings 
     concerning the adjustment of royalty rates as provided in 
     section 116, a petition described in subsection (a) may be 
     filed at any time within 1 year after negotiated licenses 
     authorized by section 116 are terminated or expire or are not 
     replaced by subsequent agreements.
       ``(B) If a negotiated license authorized by section 116 is 
     terminated or expires and is not replaced by another such 
     license agreement which provides permission to use a quantity 
     of musical works not substantially smaller than the quantity 
     of such works performed on coin-operated phonorecord players 
     during the 1-year period ending March 1, 1989, the Board, 
     upon petition filed under subsection (a) within 1 year after 
     such termination or expiration, shall promptly establish an 
     interim royalty rate or rates for the public performance by 
     means of a coin-operated phonorecord player of nondramatic 
     musical works embodied in phonorecords which had been subject 
     to the terminated or expired negotiated license agreement. 
     Such rate or rates shall be the same as the last such rate or 
     rates and shall remain in force until the conclusion of the 
     proceedings to adjust the royalty rates applicable to such 
     works, or until superseded by a new negotiated license 
     agreement, as provided in section 116(b).
       ``(5) Section 118 proceedings.--In proceedings concerning 
     the adjustment of royalty rates and terms as provided in 
     section 118, the Board shall proceed when and as provided by 
     that section.
       ``(6) Section 119 proceedings.--In proceedings concerning 
     the adjustment of royalty rates governing secondary 
     transmissions of as provided in section 119, a petition 
     described in subsection (a) may be filed during the year 2001 
     and in each subsequent fifth calendar year.
       ``(7) Proceedings concerning distribution of royalty 
     fees.--In proceedings concerning the distribution of royalty 
     fees under section 111, 119, or 1007, the Board shall, upon a 
     determination that a controversy exists concerning such 
     distribution, cause to be published in the Federal Register 
     notice of commencement of proceedings under this chapter.

     ``Sec. 809. Conduct of proceedings

       ``(a) Board Proceedings.--The Board shall, for the purposes 
     of making its determinations in carrying out the functions 
     set forth in section 806, conduct proceedings subject to 
     subchapter II of chapter 5 of title 5.
       ``(b) Procedures.--Subject to the approval of the Register 
     of Copyrights, the Board, shall adopt regulations to govern 
     the conduct of the proceedings of the Board. The regulations 
     shall include, but not be limited to, provisions for--
       ``(1) public access to and inspection of the records of the 
     Board pursuant to section 706;
       ``(2) the right of the public to attend the proceedings of 
     the Board;
       ``(3) the procedures to apply when formal hearings are 
     conducted; and
       ``(4) the procedures to apply and the basis upon which 
     distribution or royalty controversies may be decided on the 
     basis of written pleadings.
       ``(c) Participation of Copyright Office.--During the 
     conduct of proceedings, the Register of Copyrights may file 
     formally with the Board the position of the Copyright Office 
     on any matter before the Board. Such filings shall be served 
     on all parties to the proceeding. The Board may accept or 
     reject the position of the Copyright Office.
       ``(d) Majority Rule.--The Board shall act in all procedural 
     and substantive matters on the basis of majority rule.
       ``(e) Number of Presiding Judges.--The Board shall decide, 
     in its discretion, whether 1 or 3 administrative copyright 
     judges shall preside in a royalty distribution or rate 
     adjustment proceeding. In no event shall the number of 
     presiding administrative copyright judges be more than 3.
       ``(f) Participation of Parties.--Any copyright owner who 
     has filed an acceptable claim claiming entitlement to the 
     distribution of royalties, or any copyright owner or user who 
     would be affected by a royalty rate to be established or 
     adjusted by the Board, may submit relevant information and 
     proposals to the Board in proceedings applicable to the 
     interest of the copyright owner or user.
       ``(g) Time Limits for Initial Decision.--Proceedings under 
     section 118 operate under the time limits established in that 
     section. For all other proceedings, if 1 administrative 
     copyright judge is presiding in a proceeding, the Board shall 
     issue its initial decision to the parties to the proceeding 
     and the Register of Copyrights within 6 months after the 
     declaration of a controversy in the proceeding. If more than 
     1 administrative copyright judge is presiding in a 
     proceeding, the Board shall issue its initial decision to the 
     parties to the proceeding and the Register of Copyrights 
     within 1 year after the declaration of a controversy in the 
     proceeding.
       ``(h) Requirements for Initial Decisions.--The initial 
     decision under subsection (g) shall include a statement of 
     findings and conclusions and the reasons or basis therefor, 
     on all the material issues of fact, law, or discretion 
     presented on the record. The initial decision shall take into 
     account prior decisions of the Copyright Royalty Tribunal, 
     prior decisions of copyright arbitration royalty panels, as 
     adopted or modified by the Librarian of Congress, and the 
     procedural and evidentiary rulings the Librarian of Congress 
     made that were applicable to the proceedings of the copyright 
     arbitration royalty panels. Notwithstanding any provision of 
     section 603 or 604 of title 5, neither the initial decision 
     nor the final decision is required to include a regulatory 
     flexibility analysis.
       ``(i) Petitions for Reconsideration and Final Agency 
     Action.--Any party to the proceeding concerned or the 
     Register of Copyrights may petition the Board to reconsider 
     its initial decision in the proceeding. If there are no 
     petitions for reconsideration, the initial decision becomes 
     the final decision of the Board without further proceedings. 
     If there are petitions for reconsideration, the Board shall 
     issue a final decision to the parties to the proceeding and 
     the Register of Copyrights which shall constitute final 
     agency action. The time period by which parties to the 
     proceeding or the Register of Copyrights may file a petition 
     for reconsideration and the time period by which the Board 
     shall render its final decision shall be established by 
     regulation by the Board, subject to the approval of the 
     Register of Copyrights.

     ``Sec. 810. Judicial review

       ``(a) Appeals.--Within 1 week after the Board issues a 
     final decision under section 809, or, if there are no 
     petitions for reconsideration, within 1 week after the time 
     the initial decision of the Board under section 809 becomes 
     the final decision, the Board shall cause to be published in 
     the Federal Register the decision of the rate adjustment or 
     the royalty distribution, as the case may be. Any aggrieved 
     party who would be bound by the final decision may appeal the 
     decision to the United States Court of Appeals for the 
     Federal Circuit within 30 days after the publication of the 
     decision in the Federal Register. In any appeal to which the 
     Board is a party, the chief administrative copyright judge 
     shall refer the conduct of the litigation in defense of the 
     Board's decision to the Department of Justice which shall 
     have the authority to represent the Board under section 516 
     of title 28. If no appeal is brought within such 30-day 
     period, the decision of the Board is final, and the royalty 
     fee or determination with respect to the distribution of 
     fees, as the case may be, shall take effect as set forth in 
     the decision. The pendency of an appeal under this subsection 
     shall not relieve persons who would be affected by the 
     determinations on appeal under section 111, 114, 115, 116, 
     118, 119, or 1003, of the obligation to deposit the statement 
     of account or to pay royalty fees specified in those 
     sections.
       ``(b) Review Subject to Chapter 7 of Title 5.--The judicial 
     review of the Board's final decision shall be had, in 
     accordance with chapter 7 of title 5, on the basis of the 
     record before the Board.

     ``Sec. 811. Administrative matters

       ``(a) Administrative Support.--The Library of Congress, 
     upon the recommendation of the Register of Copyrights, shall 
     provide the Board with the necessary administrative services 
     and personnel related to proceedings under this title.
       ``(b) Authority To Publish in Federal Register.--The 
     actions of the Board which may be published in the Federal 
     Register by and under the authority of the Board include--
       ``(1) actions of the Board required to be published in the 
     Federal Register under this title;
       ``(2) actions of the Board required to be published in the 
     Federal Register under regulations adopted by the Board upon 
     the approval of the Register of Copyrights; and
       ``(3) regulations of the Board required to be published in 
     the Federal Register to which the Board has been delegated 
     the exclusive right to adopt.
       ``(c) Collection and Use of Fees.--
       ``(1) Deduction of costs from fees.--The Librarian of 
     Congress and the Register of Copyrights may, to the extent 
     not otherwise provided under this title, deduct from the 
     royalty fees deposited or fees collected under this title the 
     reasonable costs incurred by the Library of Congress and the 
     Copyright Office under this chapter. Such deduction may be 
     made before the fees are distributed to any copyright owner.
       ``(2) Collection of fees.--The Register of Copyrights may 
     impose and collect fees in advance to carry out the 
     ratemaking proceedings. All fees received under this section 
     shall be deposited by the Register of Copyrights in the 
     Treasury of the United States and shall be credited to the 
     appropriations for necessary expenses of the Copyright 
     Office. Such fees that are collected shall remain available 
     until expended. The Register may refund any sum paid by 
     mistake or in excess of the fee required under this section.
       ``(d) Positions Required for Administration of Compulsory 
     Licensing.--Section 307 of the Legislative Branch 
     Appropriations Act of 1994 shall not apply to the members of 
     the Board, employee positions in the Board, or employee 
     positions in the Library of Congress that are required to be 
     filled in order to carry out section 111, 114, 115, 116, 118, 
     or 119 or chapter 10.
       ``(e) Budget.--In each annual request for appropriations, 
     the Register of Copyrights shall identify the portion thereof 
     intended for the support of the Board and a statement

[[Page S1455]]

     which shall include an assessment of the budgetary needs of 
     the Board.
       ``(f) Annual Report.--The Board shall prepare an annual 
     report of its work and accomplishments during each fiscal 
     year, which the Register of Copyrights shall include in the 
     annual report required under section 701(c).

     ``Sec. 812. Rule of construction

       ``Nothing in this chapter shall be construed to affect the 
     authority of the Register of Copyrights to establish 
     regulations under sections 701 and 702.''.
       (b) Technical and Conforming Amendments.--
       (1) Table of chapters.--The item relating to chapter 8 in 
     the table of chapters for title 17, United States Code, is 
     amended to read as follows:

``8. Copyright Royalty Adjudication Board....................801''.....

       (2) Jurisdiction of federal circuit.--Section 1295(a) of 
     title 28, United States Code, is amended--
       (A) in paragraph (13) by striking ``and'' after the 
     semicolon;
       (B) in paragraph (14) by striking the period and inserting 
     a semicolon and ``and ''; and
       (C) by adding at the end the following new paragraph:
       ``(15) of an appeal from a final decision of the Copyright 
     Royalty Adjudication Board under sections 809(i) and 810 of 
     title 17.''.

     SEC. 8. TRANSITION PROVISIONS.

       (a) Transitional Procedures.--During the period beginning 
     on the date of the enactment of this Act and ending on the 
     effective date of this Act, the Register of Copyrights shall 
     adopt regulations to govern proceedings under chapter 8 of 
     title 17, United States Code, as amended by section 7 of this 
     Act. Such regulations shall remain in effect unless and until 
     the Copyright Royalty Adjudication Board, upon the approval 
     of the Register of Copyrights, adopts supplemental or 
     superseding regulations pursuant to section 809(b) of title 
     17, United States Code.
       (b) Proceedings in Progress.--
       (1) Copyright arbitration royalty panel proceedings.--
     Unless the Register of Copyrights, for good cause, finds 
     otherwise, proceedings in which a copyright arbitration 
     royalty panel has been convened by the Librarian of Congress 
     under chapter 8 of title 17, United States Code, as in effect 
     before the effective date of this Act, shall continue in 
     effect and shall be governed under chapter 8 of such title, 
     and applicable regulations, as in effect prior to such 
     effective date, and proceedings in which a copyright 
     arbitration royalty panel has not been convened by the 
     Librarian of Congress under chapter 8 of title 17, United 
     States Code, before the effective date of this Act shall be 
     suspended and recommenced under the amendments made by 
     section 7.
       (2) Continued proceedings.--For those proceedings continued 
     under paragraph (1), the functions of the Librarian of 
     Congress and the Register of Copyrights relating to the 
     report of the copyright arbitration royalty panel under title 
     17, United States Code, as in effect before the effective 
     date of this Act, may, in the Librarian's discretion, upon 
     the recommendation of the Register of Copyrights, be 
     delegated to the Copyright Royalty Adjudication Board, when 
     constituted.
       (3) Appeals.--In any appeal of a decision of the Librarian 
     of Congress adopting or rejecting a determination of a 
     copyright arbitration royalty panel which is pending in the 
     United States Court of Appeals for the District of Columbia 
     Circuit on or after the effective date of this Act, if such 
     case is remanded by the court, the Librarian of Congress 
     shall not reconvene the copyright arbitration royalty panel 
     which rendered the determination, but shall direct the 
     Copyright Royalty Adjudication Board, when constituted, to 
     conduct proceedings in accordance with the directions of the 
     court. If the case is remanded by the court after the 
     enactment date of this Act but before the effective date of 
     this Act, the Librarian of Congress shall have the discretion 
     to reconvene the copyright arbitration royalty panel which 
     rendered the determination, or direct the Copyright Royalty 
     Adjudication Board when constituted, to conduct proceedings 
     in accordance with the directions of the court.
       (c) Effectiveness of Existing Rates and Distributions.--All 
     royalty rates and all determinations with respect to the 
     proportionate division of compulsory license fees among 
     copyright claimants, whether made by the Copyright Royalty 
     Tribunal, copyright arbitration royalty panels, or by 
     voluntary agreement, before the effective date of this Act, 
     shall remain in effect until modified by voluntary agreement 
     or pursuant to the amendments made by this Act.
       (d) Transfer of Appropriations.--All unexpended balances of 
     appropriations made by the Copyright Office for the support 
     of the copyright arbitration royalty panels, as of the 
     effective date of this Act, are transferred on such effective 
     date to the support of the Copyright Royalty Arbitration 
     Board for the purposes for which such appropriations were 
     made except that, in the event that any copyright arbitration 
     royalty panels continue to operate after the effective date 
     of this Act, the Register of Copyrights shall retain such 
     portions of the unexpended balances of appropriations as are 
     necessary to support the continuing copyright arbitration 
     royalty panels.

     SEC. 9. AMENDMENTS TO OTHER PROVISIONS OF TITLE 17, UNITED 
                   STATES CODE.

       (a) Secondary Transmissions by Cable Systems.--Section 
     111(d) of title 17, United States Code, is amended--
       (1) in paragraph (2) in the last sentence by striking 
     ``Librarian of Congress'' and all that follows through the 
     end of the sentence and inserting the following: ``Copyright 
     Royalty Adjudication Board as provided in this title. The 
     Register of Copyrights may, 4 or more years after the close 
     of any calendar year, close out the account for royalty 
     payments made for that calendar year, and may treat any funds 
     remaining the such account and any subsequent deposits that 
     would otherwise be attributable to that calendar year as 
     attributable to the succeeding calendar year.''; and
       (2) in paragraph (4)--
       (A) in subparagraph (A)--
       (i) by striking ``Librarian of Congress'' the first place 
     it appears and inserting ``Copyright Royalty Adjudication 
     Board''; and
       (ii) by striking ``Librarian of Congress'' the second place 
     it appears and inserting ``Board'';
       (B) in subparagraph (B)--
       (i) by striking ``Librarian of Congress shall, upon the 
     recommendation of the Register of Copyrights'' and inserting 
     ``Copyright Royalty Adjudication Board shall'';
       (ii) by striking ``Librarian'' each subsequent place it 
     appears and inserting ``Board''; and
       (iii) in the last sentence by striking ``convene a 
     copyright royalty arbitration panel'' and inserting ``conduct 
     a proceeding''; and
       (C) in subparagraph (C)--
       (i) by striking ``Librarian of Congress'' and inserting 
     ``Copyright Royalty Adjudication Board''; and
       (ii) by adding at the end the following: ``The action of 
     the Board to distribute royalty fees may precede the 
     declaration of a controversy if all parties to the proceeding 
     file a petition with the Board requesting such distribution, 
     except that such amount may not exceed 50 percent of the 
     amounts on hand at the time of the request.''.
       (b) Scope of Exclusive Rights in Sound Recordings.--Section 
     114(f) of title 17, United States Code, is amended--
       (1) in paragraph (1)--
       (A) by amending the first sentence to read as follows: 
     ``During the first week of January, 2000, the Copyright 
     Royalty Adjudication Board shall cause notice to be published 
     in the Federal Register of the initiation of voluntary 
     negotiation proceedings for the purpose of determining or 
     adjusting reasonable terms and rates of royalty payments for 
     the activities specified in subsection (d)(2) of this 
     section.''; and
       (B) in the third sentence by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Adjudication 
     Board'';
       (2) by striking paragraphs (2), (3), and (4) and inserting 
     the following:
       ``(2) In the absence of license agreements negotiated under 
     paragraph (1), during the 60-day period beginning 6 months 
     after publication of the notice specified in paragraph (1), 
     and upon the filing of a petition in accordance with section 
     808(a), the Copyright Royalty Adjudication Board shall, 
     pursuant to chapter 8, conduct a proceeding to determine and 
     publish in the Federal Register a schedule of rates and 
     terms. In addition to the objectives set forth in section 
     807(a) in establishing or adjusting such rates and terms, the 
     Board may consider the rates and terms for comparable types 
     of digital audio transmission services and comparable 
     circumstances under voluntary license agreements negotiated 
     as provided in paragraph (1). The Copyright Royalty 
     Adjudication Board, upon the approval of the Register of 
     Copyrights, shall also establish requirements by which 
     copyright owners may receive reasonable notice of the use of 
     their sound recordings under this section, and under which 
     records of such use shall be kept and made available by 
     entities performing sound recordings.
       ``(3) License agreements voluntarily negotiated at any time 
     between 1 or more copyright owners of sound recordings and 1 
     or more entities performing sound recordings shall be given 
     effect in lieu of any determination by the Copyright Royalty 
     Adjudication Board.
       ``(4) Publication of a notice of the initiation of 
     voluntary negotiation proceedings as specified in paragraph 
     (1) and the procedures specified in paragraph (2) shall be 
     repeated, in accordance with regulations that the Copyright 
     Royalty Adjudication Board, upon the approval of the Register 
     of Copyrights, shall prescribe--
       ``(A) no later than 30 days after a petition is filed by 
     any copyright owners of sound recordings or any entities 
     performing sound recordings affected by this section 
     indicating that a new type of digital audio transmission 
     service on which sound recordings are performed is or is 
     about to become operational; and
       ``(B) during the first week of January 2005 and at 5-year 
     intervals thereafter.''; and
       (3) in paragraph (5)(A)(i) by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Adjudication 
     Board, upon the approval of the Register of Copyrights,''.
       (c) Compulsory License for Making and Distributing 
     Phonorecords.--Section 115(c)(3) of title 17, United States 
     Code, is amended--
       (1) in subparagraph (C)--
       (A) by amending the first sentence to read as follows: ``At 
     the times established in subparagraph (F), the Copyright 
     Royalty Adjudication Board shall cause notice to be published 
     in the Federal Register of the initiation of voluntary 
     negotiation proceedings

[[Page S1456]]

     for the purpose of determining reasonable terms and rates of 
     royalty payments for the activities specified in subparagraph 
     (A) until the effective date of any new terms and rates 
     established pursuant to this subparagraph or subparagraph (D) 
     or (F), or such other date (regarding digital phonorecord 
     deliveries) as the parties may agree.'';
       (B) in the third sentence by striking ``Librarian of 
     Congress'' and inserting ``Copyright Royalty Adjudication 
     Board'';
       (2) by amending subparagraph (D) to read as follows:
       ``(D) In the absence of license agreements negotiated under 
     subparagraphs (B) and (C), upon the filing of a petition in 
     accordance with section 808(a), the Copyright Royalty 
     Adjudication Board shall, pursuant to chapter 8, conduct a 
     proceeding to determine and publish in the Federal Register a 
     schedule of rates and terms. Such rates and terms shall 
     distinguish between--
       ``(i) digital phonorecord deliveries where the reproduction 
     or distribution of a phonorecord is incidental to the 
     transmission which constitute the digital phonorecord 
     delivery, and
       ``(ii) digital phonorecord deliveries in general.

      In addition to the objectives set forth in section 807(a), 
     in establishing or adjusting rates and terms, the Board may 
     consider rates and terms under voluntary license agreements 
     negotiated as provided in subparagraphs (B) and (C). The 
     Board, upon the approval of the Register of Copyrights, shall 
     also establish requirements by which copyright owners may 
     receive reasonable notice of the use of their works under 
     this section, and under which records of such use shall be 
     kept and made available by persons making digital phonorecord 
     deliveries.'';
       (3) in subparagraph (E)(i) in the first sentence by 
     striking ``Librarian of Congress'' and inserting ``Copyright 
     Royalty Adjudication Board''; and
       (4) in subparagraph (F) by striking ``Librarian of 
     Congress'' and inserting `` Copyright Royalty Adjudication 
     Board, upon the approval of the Register of Copyrights,''.
       (d) Negotiated Licenses for Public Performances by Means of 
     Coin-Operated Phonorecord Players.--Section 116 of title 17, 
     United States Code, is amended--
       (1) by amending subsection (b)(2) to read as follows:
       ``(2) Rate adjustment proceeding.--Parties not subject to 
     such a negotiation may determine, by a rate adjustment 
     proceeding in accordance with the provisions of chapter 8, 
     the terms and rates and the division of fees described in 
     paragraph (1).''; and
       (2) in subsection (c)--
       (A) in the subsection heading by striking ``Copyright 
     Royalty Arbitration Panel'' and inserting ``Copyright Royalty 
     Adjudication Board''; and
       (B) by striking ``a copyright arbitration royalty panel and 
     inserting ``the Copyright Royalty Adjudication Board''.
       (e) Use of Certain Works in Connection With Noncommercial 
     Broadcasting.--Section 118 of title 17, United States Code, 
     is amended--
       (1) in subsection (b)--
       (A) by striking paragraph (1) and redesignating paragraphs 
     (2) and (3) as paragraphs (1) and (2), respectively;
       (B) in paragraph (1), as so redesignated, by striking 
     ``Librarian of Congress'' and inserting ``Copyright Royalty 
     Adjudication Board'';
       (C) in paragraph (2), as so redesignated--
       (i) by striking ``paragraph (2)'' each place it appears and 
     inserting ``paragraph (1)'';
       (ii) by striking ``Librarian of Congress'' the first place 
     it appears and inserting ``Copyright Royalty Adjudication 
     Board'';
       (iii) by striking ``Librarian of Congress'' the second and 
     third places it appears and inserting ``Board''; and
       (iv) by striking ``Librarian of Congress'' the last place 
     it appears and inserting ``Board, upon the approval of the 
     Register of Copyrights,'';
       (2) in subsection (c)--
       (A) by striking ``1997'' and inserting ``2002''; and
       (B) by striking ``Librarian of Congress'' and inserting 
     ``Copyright Royalty Adjudication Board, upon the approval of 
     the Register of Copyrights,'';
       (3) in subsection (d)--
       (A) by striking ``(b)(2)'' and inserting ``(b)(1)''; and
       (B) by striking ``a copyright arbitration royalty panel 
     under subsection (b)(3)'' and inserting ``the Copyright 
     Royalty Adjudication Board under subsection (b)(2)''; and
       (4) in subsection (e), by striking paragraphs (1) and (2).
       (f) Digital Audio Recording Devices and Media.--
       (1) Royalty payments.--Section 1004(a)(3) of title 17, 
     United States Code, is amended in the third sentence--
       (A) by striking ``the 6th year after the effective date of 
     this chapter'' and inserting ``1998'';
       (B) by striking ``Librarian of Congress'' the first place 
     it appears and inserting ``Copyright Royalty Adjudication 
     Board''; and
       (C) by striking ``Librarian of Congress'' the second place 
     it appears and inserting ``Board''.
       (2) Entitlement to royalty payments.--Section 1006(c) of 
     title 17, United States Code, is amended by striking 
     ``Librarian of Congress shall convene a copyright arbitration 
     royalty panel which'' and inserting ``Copyright Royalty 
     Adjudication Board''.
       (3) Procedures for distributing royalty payments.--Section 
     1007 of title 17, United States Code, is amended--
       (A) in subsection (a)(1)--
       (i) by striking ``after the calendar year in which this 
     chapter takes effect'';
       (ii) by striking ``Librarian of Congress'' the first place 
     it appears and inserting ``Copyright Royalty Adjudication 
     Board''; and
       (iii) by striking ``Librarian of Congress'' the second 
     place it appears and inserting ``Board'';
       (B) in subsection (b)--
       (i) by amending the first sentence to read as follows: 
     ``After the first day of March of each year, the Copyright 
     Royalty Adjudication Board shall determine whether there 
     exists a controversy concerning the distribution of royalty 
     payments under section 1006(c).''; and
       (ii) by striking ``Librarian of Congress'' each place it 
     appears and inserting ``Board''; and
       (C) in subsection (c)--
       (i) by amending the first sentence to read as follows: ``If 
     the Copyright Royalty Adjudication Board finds the existence 
     of a controversy, the Board shall, pursuant to chapter 8 of 
     this title, conduct a proceeding to determine the 
     distribution of royalty payments.'';
       (ii) by striking ``Librarian of Congress'' each place it 
     appears and inserting ``Board''; and
       (iii) by striking ``Librarian under this section'' and 
     inserting ``Board under this section. The action of the Board 
     to distribute royalty fees may precede the declaration of a 
     controversy if all parties to the proceeding file a petition 
     with the Board requesting such distribution, except that such 
     amount may not exceed 50 percent of the amounts on hand at 
     the time of the request.''.
       (4) Adjudication of certain disputes.--Section 1010 of 
     title 17, United States Code, is amended--
       (A) by amending the section heading to read as follows:

     ``Sec. 1010. Adjudication of certain disputes'';

       (B) in subsection (a)--

       (i) in the subsection heading by striking ``Arbitration'' 
     and inserting ``Adjudication''; and
       (ii) by striking ``mutually agree to binding arbitration 
     for the purpose of determining'' and inserting ``petition the 
     Copyright Royalty Adjudication Board to determine'';

       (C) by striking subsection (b) and redesignating 
     subsections (c) and (d) as subsections (b) and (c), 
     respectively;
       (D) in subsection (b), as so redesignated, by striking 
     ``arbitration'' each place it appears and inserting 
     ``adjudication'';
       (E) by amending subsection (c), as so redesignated, to read 
     as follows:
       ``(c) Adjudication Proceeding.--The Copyright Royalty 
     Adjudication Board shall conduct an adjudication proceeding 
     with respect to the matter concerned, pursuant to chapter 8 
     of this title. The parties to the proceeding shall bear the 
     entire costs thereof in such manner and proportion as the 
     Board shall direct.''; and
       (F) by striking subsections (e), (f), and (g).

     SEC. 10. TECHNICAL AMENDMENTS.

       (a) Clerical Amendment to Chapter 10 of Title 17, United 
     States Code.--The item relating to section 1010 in the table 
     of contents for chapter 10 of title 17, United States Code, 
     is amended to read as follows:

``1010. Adjudication of certain disputes.''.

       (b) Clerical Amendment to Chapter 9 of Title 17, United 
     States Code.--The item relating to section 903 in the table 
     of contents for chapter 9 of title 17, United States Code, is 
     amended to read as follows:

``903. Ownership, transfer, licensing, and recordation.''.

       (c) Clerical Amendment to Table of Chapters.--The item 
     relating to chapter 6 in the table of chapters for title 17, 
     United States Code, is amended to read as follows:

``6. Manufacturing Requirements and Importation..............601''.....

     SEC. 11. RETRANSMISSION CONSENT.

       Section 325(b) of the Communications Act of 1934 (47 U.S.C. 
     325(b)) is amended--
       (1) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(b)(1) No cable system or other multichannel video 
     programming distributor shall retransmit the signal of a 
     broadcasting station, or any part thereof, except--
       ``(A) with the express authority of the station;
       ``(B) pursuant to section 614, in the case of a station 
     electing, in accordance with this subsection, to assert the 
     right to carriage under such section; or
       ``(C) pursuant to section 337, in the case of a station 
     electing, in accordance with this subsection, to assert the 
     right to carriage under such section.
       ``(2) The provisions of this subsection shall not apply 
     to--
       ``(A) retransmission of the signal of a noncommercial 
     broadcasting station;
       ``(B) retransmission of the signal of a superstation by a 
     satellite carrier to subscribers for private home viewing if 
     the originating station was a superstation on January 1, 
     1998;
       ``(C) retransmission of the signal of a broadcasting 
     station that is owned or operated by, or affiliated with, a 
     broadcasting network directly to a home satellite antenna, if 
     the household receiving the signal is located in an area in 
     which such station

[[Page S1457]]

     may not assert its rights not to have its signal duplicated 
     under the Commission's network nonduplication regulations; or
       ``(D) retransmission by a cable operator or other 
     multichannel video programming distributor of the signal of a 
     superstation if such signal was obtained from a satellite 
     carrier and the originating station was a superstation on 
     January 1, 1998.'';
       (2) by adding at the end of paragraph (3) the following new 
     subparagraph:
       ``(C) Within 45 days after the effective date of the 
     Copyright Compulsory License Improvement Act, the Commission 
     shall commence a rulemaking proceeding to revise the 
     regulations governing the exercise by television broadcast 
     stations of the right to grant retransmission consent under 
     this subsection, and such other regulations as are necessary 
     to administer the limitation contained in paragraph (2). Such 
     regulations shall establish election time periods that 
     correspond with those regulations adopted under subparagraph 
     (B). The rulemaking shall be completed within 180 days after 
     the effective date of the Copyright Compulsory License 
     Improvement Act.''; and
       (3) by adding at the end the following new paragraph:
       ``(7) For purposes of this subsection:
       ``(A) The term `superstation' means a television broadcast 
     station, other than a network station, licensed by the 
     Commission that is secondarily transmitted by a satellite 
     carrier.
       ``(B) The term `satellite carrier' has the meaning given 
     that term in section 119(d) of title 17, United States 
     Code.''.

     SEC. 12. MUST-CARRY FOR SATELLITE CARRIERS RETRANSMITTING 
                   TELEVISION BROADCAST SIGNALS.

       Title III of the Communications Act of 1934 is amended by 
     inserting after section 336 the following new section:

     ``SEC. 337. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE 
                   CARRIERS.

       ``(a) Carriage Obligations.--Each satellite carrier 
     providing direct to home service of a network station to 
     subscribers located within the local market of such station 
     shall offer to carry all television broadcast stations 
     located within that local market, subject to section 325(b). 
     Carriage of additional television broadcast stations within 
     the local market shall be at the discretion of the satellite 
     carrier, subject to section 325(b).
       ``(b) Duplication Not Required.--Notwithstanding subsection 
     (a), a satellite carrier shall not be required to offer to 
     carry the signal of any local television broadcast station 
     that substantially duplicates the signal of another local 
     television broadcast station which is secondarily transmitted 
     by the satellite carrier, or to offer to carry the signals of 
     more that one local television broadcast station affiliated 
     with a particular broadcast network (as the term is defined 
     by regulation).
       ``(c) Channel Positioning.--Each signal carried in 
     fulfillment of the carriage obligations of a satellite 
     carrier under this section shall be carried on the satellite 
     carrier channel number on which the local television 
     broadcast station is broadcast over the air, or on the 
     channel on which it was broadcast on January 1, 1985, or on 
     the channel it was broadcast on January 1, 1998, at the 
     election of the station, or on such other channel number as 
     is mutually agreed upon by the station and the satellite 
     carrier. Any dispute regarding the positioning of local 
     television broadcast stations shall be resolved by the 
     Commission.
       ``(d) Compensation for Carriage.--A satellite carrier shall 
     not accept or request monetary payment or other valuable 
     consideration in exchange either for carriage of local 
     television broadcast stations in fulfillment of the 
     requirements of this section or for channel positioning 
     rights provided to such stations under this section, except 
     that any such station may be required to bear the costs 
     associated with delivering a good quality signal to the 
     principal headend of the satellite carrier.
       ``(e) Remedies.--
       ``(1) Complaints by broadcast stations.--Whenever a local 
     television broadcast station believes that a satellite 
     carrier has failed to meet its obligations under this 
     section, such station shall notify the carrier, in writing, 
     of the alleged failure and identify its reasons for believing 
     that the satellite carrier is obligated to offer to carry the 
     signal of such station or has otherwise failed to comply with 
     the channel positioning or repositioning or other 
     requirements of this section. The satellite carrier shall, 
     within 30 days of such written notification, respond in 
     writing to such notification and either commence to carry the 
     signal of such station in accordance with the terms requested 
     or state its reasons for believing that it is not obligated 
     to carry such signal or is in compliance with the channel 
     positioning and repositioning or other requirements of this 
     section. A local television broadcast station that is denied 
     carriage or channel positioning or repositioning in 
     accordance with this section by a satellite carrier may 
     obtain review of such denial by filing a complaint with the 
     Commission. Such complaint shall allege the manner in which 
     such satellite carrier has failed to meet its obligations and 
     the basis for such allegations.
       ``(2) Opportunity to respond.--The Commission shall afford 
     such satellite carrier and opportunity to present data and 
     arguments to establish that there has been no failure to meet 
     its obligations under this section.
       ``(3) Remedial actions; dismissal.--Within 120 days after 
     the date a complaint is filed, the Commission shall determine 
     whether the satellite carrier has met its obligations under 
     this section. If the Commission determines that the satellite 
     carrier has failed to meet such obligations, the Commission 
     shall order the satellite carrier to reposition the 
     complaining station or, in the case of an obligation to carry 
     a station, to commence carriage of the station and to 
     continue such carriage for at least 12 months. If the 
     Commission determines that the satellite carrier has fully 
     met the requirements of this section, it shall dismiss the 
     complaint.
       ``(f) Regulations by Commission.--Within 180 days after the 
     effective of this section, the Commission shall, following a 
     rulemaking proceeding, issue regulations implementing the 
     requirements imposed by this section.
       ``(g) Definitions.--As used in this section:
       ``(1) Television broadcast station.--The term `television 
     broadcast station' means a full-power television broadcast 
     station, and does not include a low-power or translator 
     television broadcast station.
       ``(2) Local market.--The term `local market' means the 
     designated market area in which a station is located and--
       ``(A) for a commercial television broadcast station located 
     in any of the 150 largest designated market areas, all 
     commercial television broadcast stations licensed to a 
     community within the same designated market area are within 
     the same local market;
       ``(B) for a commercial television broadcast station that is 
     located in a designated market area that is not one of the 
     150 largest, the local market includes, in addition to all 
     commercial television broadcast stations licensed to a 
     community within the same designated market area, any station 
     that is significantly viewed, as such term is defined in 
     section 76.54 of the Commission's regulations (47 C.F.R. 
     76.54); and
       ``(C) for a noncommercial educational television broadcast 
     station, the local market includes any station that is 
     licensed to a community within the same designated market 
     area as the noncommercial educational television broadcast 
     station.
       ``(3) Designated market area.--The term `designated market 
     area' means a designated market area, as determined by the 
     Nielsen Media Research and published in the DMA Market and 
     Demographic Report.''.

     SEC. 13. NETWORK NONDUPLICATION; SYNDICATED EXCLUSIVITY AND 
                   SPORTS BLACKOUT.

       (a) Regulations.--
       (1) In general.--Within 45 days after the effective date of 
     this Act, the Federal Communications Commission shall 
     commence a rulemaking to establish regulations that apply 
     network nonduplication protection, syndicated exclusivity 
     protection, and sports blackout protection to the 
     retransmission of broadcast signals by satellite carriers to 
     subscribers for private home viewing. To the extent possible, 
     such regulations shall, subject to paragraph (2), include the 
     same level of protection accorded retransmissions of 
     television broadcast signals by cable systems for network 
     nonduplication (47 C.F.R. 76.92), syndicated exclusivity (47 
     C.F.R. 151), and sports blackout (47 C.F.R. 76.67).
       (2) Network nonduplication.--The network nonduplication 
     regulations required under paragraph (1) shall allow a 
     television broadcast station in any local market to assert 
     nonduplication rights--
       (A) against a satellite carrier throughout such local 
     market if that satellite carrier retransmits to subscribers 
     for private home viewing in such local market the signal of 
     another television broadcast station located within such 
     local market; or
       (B) against all satellite carriers within the zone in which 
     the television broadcast station may be received over-the-
     air, using conventional consumer television receiving 
     equipment, as determined under regulations prescribed by the 
     Federal Communications Commission, but such zone shall not 
     extend beyond such local market of such station.
       (3) Local market defined.--The term ``local market'' has 
     the meaning provided in section 337(g) of the Communications 
     Act of 1934, as added by section 12 of this Act.
       (b) Deferred Applicability of Amendments to Section 119 of 
     Title 17, United States Code.--Notwithstanding the amendments 
     to section 119 of title 17, United States Code, made by this 
     Act, until the regulations regarding network nonduplication 
     protection are established under subsection (a), the 
     statutory license under subsection (a) of such section 119 
     for secondary transmissions of primary transmissions of 
     programming contained in a primary transmission made by a 
     network station (as defined in section 119(d) of title 17, 
     United States Code, as in effect on the day before the 
     effective date of this Act) shall be limited to secondary 
     transmissions to persons who reside in unserved households 
     (as defined in section 119(d) of title 17, United States 
     Code, as in effect on the day before the effective date of 
     this Act).

     SEC. 14. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on January 1, 1999.
                                                                    ____


    Section by Section Analysis of the Copyright Compulsory License 
                            Improvement Act


                               section 1

       The title of the bill is the ``Copyright Compulsory License 
     Improvement Act.''


                               section 2

       Section 2 of the bill amends the section 119 satellite 
     carrier compulsory license of the

[[Page S1458]]

     Copyright Act to create a statutory licensing scheme that 
     permits satellite carriers to provide their subscribers with 
     local and distant television broadcast signals, as well as 
     the national satellite feed of the Public Broadcasting 
     Service. Satellite carriers may retransmit any television 
     broadcast signals to subscribers for private home viewing, 
     provided that such retransmissions are in compliance with the 
     rules and regulations of the Federal Communications 
     Commission. Such compliance would include syndicated 
     exclusivity, sports blackout and network nonduplication 
     protection for broadcasters, as required by section 13 of the 
     bill.
       Section 2 requires satellite carriers to provide initial 
     and updated lists to local television stations identifying 
     subscribers in the local television station's area who 
     receive satellite service and the names of the network 
     stations provided to those subscribers. This will allow 
     television stations to preserve their network nonduplication 
     rights provided in section 13 of the bill.
       Section 2 prohibits satellite carriers from willfully 
     altering the programming contained on television broadcast 
     signals and the PBS national satellite feed that the carriers 
     retransmit. In addition, satellite carriers are prohibited 
     from unlawfully discriminating against a distributor of 
     satellite retransmitted broadcast programming, and any such 
     unlawful discrimination constitutes an act of copyright 
     infringement subject to the penalties of chapter 5 of the 
     Copyright Act. It is also copyright infringement for a 
     satellite carrier to fail to submit a statement of account 
     and royalty fee necessary to obtain the satellite compulsory 
     license.


                               section 3

       Section 3 of the bill creates the terms and conditions of 
     the satellite compulsory license. Carriers must submit a 
     statement of account and royalty fee to the Copyright Office 
     on a semiannual basis for subsequent distribution to 
     copyright owners. The royalty fee for retransmission of 
     distant television broadcast stations, and the PBS national 
     feed, is the royalty fee in effect on date of enactment of 
     the bill for retransmission of distant television broadcast 
     signals. There is no royalty fee for television broadcast 
     signals that are retransmitted to subscribers who reside 
     within the local markets of such signals.
       The remainder of section 3 continues the provisions of the 
     existing law by prescribing how the royalty fees are 
     collected and maintained for distribution, and how copyright 
     owners of works contained on retransmitted television 
     broadcast signals and the PBS national feed may claim 
     royalties.


                               section 4

       Section 4 of the bill contains definitions of terms used in 
     the section 119 compulsory license. Most of the definitions 
     in the existing law are carried forward. New provisions 
     include a definition of ``designated market area'' and 
     ``local market'' for determining royalty-free local 
     retransmissions of broadcast signals, and a definition of the 
     new PBS national feed.


                               section 5

       Section 5 of the bill carries forward the provision of 
     existing law maintaining exclusivity of the satellite license 
     with the cable compulsory license of the Copyright Act, found 
     at 16 U.S.C. 111. That is, a satellite carrier making 
     secondary transmissions of television broadcast signals, and 
     the PBS national feed, for private home viewing may only do 
     so under the terms of the section 119 license, and may not 
     invoke the terms of the section 111 cable license.


                               section 6

       Section 6 of the bill contains a conforming amendment 
     amending the table of contents of chapter 1 of the Copyright 
     Act.


                               section 7

       Section 7 of the bill completely revises chapter 8 of the 
     Copyright Act, replacing the current Copyright Arbitration 
     Royalty Panels with a Copyright Royalty Adjudication Board.
       New section 801 of the Copyright Act establishes the 
     Copyright Royalty Adjudication Board within the U.S. 
     Copyright Office.
       New section 802 of the Copyright Act establishes the 
     membership and qualifications of the Board. New section 
     802(a) establishes that the Board should be comprised of one 
     full-time Chief Administrative Copyright Judge and at least 
     two part-time Administrative Copyright Judges. It is left up 
     to the discretion of the Librarian of Congress, upon the 
     recommendation of the Register of Copyrights, to determine 
     how many other part-time Administrative Copyright Judges the 
     Board shall have. The determination should be based on how 
     many judges the Board will need to conduct its business in a 
     timely manner.
       New section 802(b) requires that the Chief Administrative 
     Copyright Judge be an attorney with ten or more years of 
     legal practice and have experience either in administrative 
     hearings or court trials, and a demonstrated knowledge of 
     copyright law. Other Administrative Copyright Judges must 
     possess expertise in the business and economics of industries 
     affected by the actions the Board takes.
       New section 802(c) provides that the term of the Board 
     members shall be five years on a staggered basis so that no 
     more than one term is due to expire in any one year. To 
     achieve this, the Librarian of Congress, upon the 
     recommendation of the Register of Copyrights, shall appoint 
     some of the initial Board members to shorter than five year 
     terms.
       New section 802(d) provides compensation for the members of 
     the Board at the Senior Level in accordance with the 
     provisions of 5 U.S.C. Sec. 5376.
       New Section 803 of the Copyright Act provides for selection 
     of the members of the Board. New section 803(a) provides that 
     the Librarian of Congress, upon the recommendation of the 
     Register of Copyrights, selects the members of the Board. The 
     Librarian may only select those persons found qualified under 
     section 802(b) and found to meet the financial conflict of 
     interest standards adopted under section 805(a). The 
     Librarian may reselect, without limit, members of the Board 
     to additional terms. Section 803(b) provides that actions 
     taken by the Board during those times will be valid, 
     notwithstanding any temporary vacancy.
       New section 804 of the Copyright Act provides for the 
     independence of the Board. New section 804(a) provides that 
     the Board shall have decisional independence on the 
     substantive matters before it. Board members are neither to 
     receive performance appraisals nor are they to be assigned 
     duties inconsistent with their duties and responsibilities as 
     members of the Board.
       New section 805 of the Copyright Act provides for removal 
     and sanction of the members of the Board. New section 805(a) 
     provides that the Register of Copyrights shall adopt 
     regulations regarding the standards of conduct that members 
     of the Board are expected to maintain. The Register is 
     specifically instructed to adopt regulations concerning 
     financial conflict of interest and ex parte communications.
       New section 805(b) provides that the Librarian, upon the 
     recommendation of the Register of Copyrights, may remove or 
     sanction a member of the Board, upon notice and opportunity 
     for hearing, for violation of any of the standards of conduct 
     adopted under section 804(a). In addition, the Librarian may 
     also remove or sanction for misconduct, neglect of duty, or 
     any disqualifying physical or mental disability.
       New section 806 of the Copyright Act provides for the 
     functions of the Board. New section 806(a) enumerates the 
     rate setting, royalty distribution, and rulemaking functions 
     that are delegated to the Board. The Board determines the 
     rates for: cable retransmission of broadcast signals, the 
     making and distributing of phonorecords by means other than 
     digital phonorecord delivery, satellite carrier 
     retransmission of broadcast signals, and the importing and 
     distributing or manufacturing and distributing of digital 
     audio recording devices.
       The Board determines the rate and terms for: the public 
     performance of a sound recording by means of a digital audio 
     transmission; the making and distributing of phonorecords by 
     means of a digital phonorecord delivery; the public 
     performance of music on jukeboxes; the use of music and 
     visual works by public broadcasting entities; and the 
     transmission to the public by a satellite carrier of a 
     primary transmission of a public telecommunications signal.
       The Board accepts or rejects claims filed by copyright 
     owners to royalties deposited with the Copyright Office in 
     the cable fund, the satellite carrier fund, and the digital 
     audio recording fund. Then, for those claims that the Board 
     accepts, the Board determines how much each claimant should 
     receive from those funds.
       The Board has jurisdiction to decide, when petitioned, if a 
     particular digital audio recording device or digital audio 
     recording interface device is subject to the provisions of 
     chapter 10 for paying a royalty on the distribution of such 
     devices.
       The Board also has certain rulemaking authority, some of 
     which is upon the approval of the Register of Copyrights, 
     concerning the filing of claims, the notice and recordkeeping 
     requirements pertaining to some of the compulsory licenses, 
     and the Board's own procedures.
       New section 806(b) provides that the creation of the 
     Copyright Royalty Adjudication Board does not diminish the 
     authority of the Register of Copyrights to establish 
     regulations interpreting the provisions and terms of the 
     Copyright Act.
       New section 807 of the Copyright Act sets out the factors 
     for determining the royalty fees for the section 114, 115, 
     116, 118 and 119 compulsory licenses of the Copyright Act. 
     The section also lists the factors that the Board shall take 
     into account when determining or adjusting royalty rates.
       New section 808 of the Copyright Act provides for the 
     institution of royalty distribution and rate adjustment 
     proceedings under the compulsory licenses. New section 808 
     instructs the Board when proceedings shall occur, and whether 
     the proceedings require a petition to initiate them or 
     whether they commence automatically.
       New section 809 of the Copyright Act describes the conduct 
     of royalty distribution and rate adjustment proceedings. New 
     section 809(a) provides that the Board shall conduct its 
     proceedings in accordance with the Administrative Procedure 
     Act. New section 809(b) provides that the Board shall adopt 
     its own rules of procedures upon the approval of the Register 
     of Copyrights. New section 809(c) authorizes the Copyright 
     Office, in its discretion, to file formal pleadings with the 
     Board on any matter pending before the Board. All Copyright 
     Office pleadings shall be formally filed and served on all 
     the parties to the proceeding. The Board may accept or reject 
     the advice of the Copyright Office.

[[Page S1459]]

       New section 809(d) provides that all actions of the Board 
     are by majority rule. New section 809(e) allows the Board the 
     discretion to determine whether, in a particular proceeding, 
     one or three members should preside. New section 809(f) 
     permits all parties whose claims are accepted or who have an 
     interest in the royalty rate to be set to participate in the 
     proceeding and submit relevant proposals and evidence.
       New section 809(g) provides that, except as provided in 
     sections 118 and 119(c), the time limit for the issuance of 
     initial decisions in proceedings with one presiding member 
     shall be six months from the declaration of the controversy, 
     and the time limit for initial decisions in proceedings with 
     three presiding members shall be one year from the 
     declaration on the controversy.
       New section 809(h) provides that the initial decision shall 
     contain the same level of reasoned decision-making that is 
     required under the Administrative Procedure Act, and take 
     into account the precedent of the decisions of the Copyright 
     Royalty Tribunal, the copyright arbitration royalty/panels 
     and the decisions of the Librarian of Congress made in 
     respect to the copyright arbitration royalty panels.
       New section 809(i) provides the parties to the proceeding 
     and the Register of Copyrights an opportunity to petition the 
     entire Board to reconsider any initial decision issued by its 
     presiding member or members. If there are no petitions for 
     reconsideration, the initial decision becomes the final 
     decision automatically. If there are petitions for 
     reconsideration, the entire Board considers the petition, and 
     issues a final decision. The final decision of the entire 
     Board constitutes final agency action. Section 809(i) 
     provides that the time limits for filing petitions for 
     reconsideration, and for the entire Board to issue the final 
     decision shall be determined by regulation.
       New section 810 of the Copyright Act provides for judicial 
     review of Board determinations. New section 810(a) provides 
     that when the initial decision becomes the final decision, 
     the Board shall have one week to publish the final decision 
     in the Federal Register. Parties aggrieved by the decision of 
     the Board shall have 30 days from the appearance of the final 
     decision in the Federal Register to appeal the decision to 
     the United States Circuit Court of Appeals for the Federal 
     Circuit. In that case, the Board shall be the defending 
     party, and the Chairperson of the Board shall refer the 
     conduct of the Board's defense to the Department of Justice. 
     Notwithstanding the pendency of any appeal, persons who 
     would pay the royalty rates adjusted by the Board's 
     decision are still obligated to pay the adjusted rate and, 
     if applicable, to file a statement of account with the 
     Copyright Office.
       New section 810(b) provides that judicial review of the 
     Board's final decision is in accordance with the 
     Administrative Procedure Act.
       New section 811 delineates various administrative matters 
     related to administration of the compulsory licenses. New 
     section 811(a) instructs the Librarian of Congress, upon the 
     recommendation of the Register of Congress, to provide the 
     Board with the necessary administrative services and 
     personnel support it needs. Personnel support may include the 
     services of experts such as a statistician or an economist, 
     when a particular proceeding requires such expertise.
       New section 811(b) delegates to the Board the authority to 
     publish in the Federal Register notices of the Board's 
     actions in its proceedings, and such regulations as the Board 
     has been delegated the exclusive right to adopt. New section 
     811(c) authorizes the Librarian of Congress to assess fees 
     for the reasonable costs incurred in a rate making proceeding 
     from those parties interested in participating in the 
     proceeding. The section further authorizes the Register of 
     Copyrights to deduct from the ratemaking fees and from the 
     royalty fees deposited with the Copyright Office the 
     reasonable costs incurred by the Copyright Office and the 
     Board.
       New section 811(d) provides that notwithstanding any 
     ceiling imposed on the full-time equivalent positions in the 
     Library of Congress, the members of the Board or employees in 
     support of the Board do not count in the calculation of that 
     ceiling.
       New section 811(e) provides that when the Register of 
     Copyright submits to Congress the budget of the Copyright 
     Office, the Register shall identify the portion intended for 
     the Board with a statement assessing the Board's budgetary 
     needs.
       Section 811(f) provides that the Board shall prepare its 
     own annual report and it shall be included in the Copyright 
     Office's annual report.
       Section 812 provides a rule of construction continuing the 
     general power of the Register of Copyrights to establish 
     regulations governing the Copyright Act, and makes technical 
     and conforming amendments, including providing for appeals 
     from decisions of the Board to the Court of Appeals for the 
     Federal Circuit.


                               section 8

       Section 8 of the bill provides transitional rules for the 
     establishment of the Board. For example, prior to the 
     constituting of the Board, the Register of Copyrights shall 
     adopt the Board's rules of procedure, but that when the Board 
     is constituted, it may adopt supplemental or superseding 
     regulations, upon the approval of the Register of Copyrights.
       The section also provides that copyright arbitration 
     royalty panels that have already been convened at the time of 
     the passage of this act may continue and complete their 
     proceeding, unless the Register of Copyrights, finds for good 
     cause, that the proceeding should be discontinued. For those 
     proceedings that continue, the report of the copyright 
     arbitration royalty panels shall be submitted to the 
     Librarian of Congress, or the Librarian may, in his 
     discretion, direct the panel to submit the report to the 
     Board. If there are any appeals pending of a decision of a 
     copyright arbitration royalty panel that are eventually 
     remanded by the Court, the remanded case shall go to the 
     Board, not to a reconvened copyright arbitration royalty 
     panel.


                               section 9

       Section 9 of the bill contains conforming amendments to 
     substitute the Copyright Royalty Adjudication Board for the 
     copyright arbitration royalty panels and the Librarian of 
     Congress wherever appropriate.


                               section 10

       Section 10 makes technical and conforming amendments.


                               section 11

       Section 11 amends the section 325 of the Communications Act 
     to provide that satellite carriers must in certain 
     circumstances obtain retransmission permission from a 
     broadcaster before they can retransmit the signal of a 
     network broadcast station. Like the regime applicable to the 
     cable industry, network broadcasters are afforded the option 
     of either granting retransmission consent, or they may elect 
     must-carry status as provided in section 12 of the bill. All 
     satellite carriers that provide local service of television 
     network stations must obtain either retransmission consent of 
     the local broadcasters, or carry their signals subject to the 
     must-carry provisions.
       Section 11 does exempt carriage of certain broadcast 
     stations from the retransmission consent requirement. 
     Retransmission consent does not apply to noncommercial 
     broadcasting stations, and superstations that existed as 
     superstations on January 1, 1998. Also exempt from the 
     retransmission consent requirement is retransmission of a 
     network station to a household that is not subject to the 
     network nonduplication protection provided in section 13 of 
     the bill. The purpose of this provision is to allow 
     subscribers who reside in the designated market area of a 
     network affiliate, but do not live in an area where the 
     relevant local stations can request network nonduplication 
     (assuring that a subscriber does not or cannot otherwise 
     receive the signal of the local affiliate) to obtain a 
     distant signal of the same network from their satellite 
     carrier.
       Section 11 also directs the Federal Communications 
     Commission to, within 45 days of enactment of the bill, 
     commence a rulemaking proceeding to adopt regulations 
     governing the exercise of retransmission rights for satellite 
     retransmissions for private home viewing.


                               section 12

       Section 12 of the bill creates must-carry obligations for 
     satellite carriers retransmitting television broadcast 
     signals. The provisions are similar to those applicable to 
     the cable industry. Any satellite carrier that retransmits a 
     network television broadcast signal to subscribers residing 
     within the local market of that signal, must offer to carry 
     all the television stations in the local market to 
     subscribers residing in the local market. This approach of 
     ``carry one, then carry all'' is subject to the 
     retransmission consent election of section 11 of the bill. 
     Thus, a satellite carrier does not have to carry a local 
     television broadcast station if the station elects 
     retransmission consent rather than must-carry. The ``local 
     market'' of a broadcast station is defined as the station's 
     Designated Market Area, as determined by Nielsen Media 
     Research.
       Section 12 tracks the cable must-carry provisions of the 
     1992 Cable Act by relieving satellite carriers from the 
     burden of having to carry more than one affiliate of the same 
     network if both of the affiliates are located in the same 
     local market. Local broadcasters are also afforded channel 
     positioning rights, and are required to provide a good 
     quality signal to the satellite carrier's principal headend 
     in order to assert must-carry rights. Satellite carriers are 
     forbidden from obtaining compensation from local broadcasters 
     in exchange for carriage. Section 12 also provides a means 
     for broadcasters to seek redress from the Federal 
     Communications Commission for violations of the must-carry 
     obligations.


                               section 13

       Section 13 of the bill directs the Federal Communications 
     Commission, within 45 days of enactment of the bill, to 
     commence rulemaking proceedings to impose network 
     nonduplication protection, syndicated exclusivity and sports 
     blackout protection on satellite retransmissions of 
     television broadcast signals for private home viewing. The 
     regulations to be adopted are to be similar to those 
     currently in force for retransmissions of television 
     broadcast signals by cable systems, to the extent possible, 
     recognizing that there are technological and other 
     differences between cable and satellite.
       In adopting network nonduplication protection rules, the 
     Commission is directed to adopt rules that permit satellite 
     carriers to provide distant network signals to subscribers 
     who reside within the designated market area of a network 
     station affiliated with the same network but cannot receive 
     an over-the-air signal of the local affiliate, and further do 
     not receive the local signal from a cable or satellite 
     service. The purpose of this provision is to prevent local 
     affiliates from asserting network nonduplication protection

[[Page S1460]]

     against subscribers who legitimately cannot or do not receive 
     the local network affiliate signal, but allow stations to 
     protect their network exclusivity if they do. Thus, if the 
     satellite carrier serving a subscriber provides him or her 
     with the local affiliate for that designated market area, the 
     satellite carrier may not also provide such subscriber with 
     distant network signals affiliated with the same network. 
     Additionally, if a subscriber can receive the local 
     affiliate's signal over the air, the satellite carrier cannot 
     provide distant network signals affiliated with the same 
     network. This replaces the current ``white area'' system, 
     based on the Grade-B contour of a station enforceable in 
     court, with rules prescribed and overseen by the FCC, once 
     the FCC establishes rules.


                               section 14

       This section provides that the bill shall become effective 
     on January 1, 1999.

  Mr. LEAHY. Mr. President, today I am introducing a bill with Chairman 
Hatch concerning satellite television that I hope will prove to be good 
news for consumers throughout the nation and in Vermont.
  I greatly appreciate this opportunity to work with Chairman Hatch and 
Senator Kohl.
  We intend for this bill to lead to head-to-head competition between 
cable and satellite TV providers. This should open more choices and 
services to Vermonters, at lower prices. The bill also will allow 
householders who want to subscribe to this new satellite TV service to 
receive all local Vermont TV stations by satellite. The goal is to 
offer Vermonters more choices, more TV selections--and especially of 
local programming--but at lower rates.
  In areas of the country where there is this full competition with 
cable providers, rates to customers are considerably lower. I helped 
foster the home satellite industry with passage of the Satellite Home 
Viewer Act in 1988 and the extension of that act in 1994. Now it is 
time for the home satellite industry to offer a competitive alternative 
to cable. It is my hope that we can foster that competition and do so 
in a way that preserves the local perspective and service provided by 
the local network affiliate system.
  This bill is intended to permit satellite TV providers to offer the 
networks through their local TV channels to viewers throughout Vermont 
and a full complement of superstations and movies. This means that 
local Vermont TV stations will be available over satellite to many 
areas of Vermont currently unserved by satellite or by cable.
  I have received scores of letters from Vermonters who have complained 
about the current situation. Under current law, it is illegal for 
satellite TV providers to offer local TV channels over a satellite dish 
when you live in a area where you are likely to get a clear TV signal 
with a regular rooftop antenna.
  This means that thousands of Vermonters living in or near Burlington 
cannot receive local signals over their satellite dishes. I understand 
their frustration. At our farm in Middlesex, we receive signals from 
one and a half stations.
  This bill is intended to adjust the statutory copyright licenses in 
order to allow satellite carriers to offer local TV signals to viewers 
no matter where they live in Vermont. To take advantage of this 
opportunity, satellite carriers will in general have to follow the 
rules that cable providers have to follow. This will mean that they 
must carry all full-power local Vermont TV stations in their TV 
offering.
  Today, Vermonters receive satellite signals with programming from 
stations in other states. In other words, they would get a CBS station 
from another state but not WCAX, the Burlington CBS affiliate. I hope 
that our bill will correct this upside-down situation and make network 
programming available to all, while preserving local programming and 
respecting the affiliate system.
  By allowing satellite providers to offer a larger variety of 
programming, including local stations, the satellite industry would be 
able to compete with cable, and the cable industry will be competing 
with satellite carriers. Cable will continue to be a highly effective 
competitor with its ability to offer extremely high-speed Internet 
connections to homes and businesses.
  A major reason I voted against the Telecommunications Act of 1996--
and I was only one of five who voted against that bill--was my fear 
that cable, satellite and telephone rates would go up significantly in 
rural states. I wish I had been wrong, but the rates, in fact, have 
been climbing since then. When fully implemented this bill should 
reverse that trend as has been the case in cities where there were 
competitors to cable.
  The second major improvement in this bill is that satellite carriers 
that offer local Vermont channels in their mix of programming will be 
able to reach Vermonters throughout our state. The system will be based 
on regions called Designated Market Areas, or DMAs, established through 
marketing surveys done by the Nielsen Corporation ratings organization.
  Vermont has one large DMA covering most of the state and part of the 
Adirondacks in New York--the Burlington-Plattsburg DMA--and parts of 
two smaller ones in Bennington County (the Albany-Schenectady-Troy DMA) 
and in Windham County (the Boston DMA).
  Over time those two counties could be included in the Burlington-
Plattsburg DMA depending on marketing, advertising and other 
demographic factors that Nielsen Corporation examines.
  This new satellite system is not yet available. Companies are 
preparing to launch spot-beam satellites to take advantage of this 
bill. I encourage them to do so. Using current technology, signals 
would be provided by spot-beam satellites using some 150 regional 
uplink sites throughout that nation to beam local signals up to two 
satellites. Those satellites would use 60 spot beams to send those 
local signals, received from the regional uplinks, back to satellite 
dish owners. High-definition TV would be offered under this system at a 
later date.
  Under this bill, and using this spot-beam technology, home owners 
with satellite dishes in downtown Burlington, and in almost every 
county in Vermont, would receive all the full-power TV stations in the 
Burlington-Plattsburg DMA, including Vermont public television. 
Therefore, subscribers to the new satellite technology would be able to 
receive WPTZ, WCAX, WNNE, Vermont public television, and other full-
power broadcast stations, throughout most of Vermont. Bennington 
residents would receive the stations in the Schenectady-Albany-Troy 
DMA. Windham County residents would receive full power stations in the 
Boston DMA.

  As I mentioned earlier, Bennington and Windham Counties could be 
included in the Burlington-Plattsburg DMA at a later date as the 
demographics of the region evolve, or as technology changes.
  Under this bill, Vermonters will have more choices. Those who want 
this new satellite service will be allowed to sign up in the next 
couple of years or keep their present satellite service.
  Those who want to stick with cable, or with regular broadcast TV, are 
able to continue their viewing in those ways. Since technology advances 
so quickly, other systems could be developed before this bill is fully 
implemented that would provide other service but using different 
technologies.
  I share the frustration of so many that laws and regulations in this 
case have tended to frustrate consumer choices and stifle technology. 
That is not the way it should be. It is time to update our satellite 
viewing laws to encourage full and vigorous competition with the cable 
industry and expand viewer options.
  Mr. KOHL. Thank you, Mr. President. Along with my colleagues, 
Senators Hatch and Leahy, I rise in support of the Copyright Compulsory 
License Improvement Act of 1997. This proposal, although clearly not a 
final product, is an important step forward in creating true 
competition between satellite and cable television. And that is an 
important step forward for consumers.
  Mr. President, this bill generally takes the right approach. It gives 
satellite carriers the ability to provide the one thing that consumers 
want most: local television broadcast signals. In return, the satellite 
carriers must comply with FCC regulations governing syndicated 
exclusivity, sports blackout protection, and network nonduplication. 
The measure also creates a retransmission consent process, and 
establishes certain ``must carry'' obligations on satellite carriers 
that rebroadcast local signals. As a

[[Page S1461]]

general premise, it seems only fair that the benefits of carrying local 
signals should be balanced with reasonable regulatory burdens that are 
consistent with cable's obligations. But we should also look at 
reducing at least some of the ``must carry'' burdens--for example, why 
should any provider be required to carry the Home Shopping Network, 
which is predominantly commercial?
  So what does all this mean for businesses and consumers? Hopefully, 
it will create more availability and affordability in television 
programs. And it will help to preserve local television stations, who 
provide all of us with vital information like news, weather, and 
special events--especially sports. We ought to get moving on this 
sooner, rather than later. It would be a mistake to wait until just 
before the license expires in 1999.
  This measure replaces the Copyright Arbitration Royalty Panels with a 
Copyright Royalty Adjudication Board. In addition to its clever new 
acronym (``CRAB''), the Board in the future will hopefully find a 
better way to create parity in the fees that cable and satellite 
providers pay in copyright royalties. This time around, however, it 
would be wise to lower legislatively the recently proposed 27 cent 
rate.
  In any event, we should view the Copyright Compulsory License 
Improvement Act as a point of departure rather than a final product. I 
am hopeful we can work with the Commerce Committee, which clearly has 
an important role to play in many of these matters. This measure is a 
significant step in promoting competition, and Senators Hatch and Leahy 
deserve enormous credit for creating a constructive approach, which can 
only benefit consumers nationwide. I urge my colleagues to join me in 
supporting it.

                          ____________________