[Congressional Record Volume 144, Number 24 (Tuesday, March 10, 1998)]
[Senate]
[Pages S1697-S1702]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LUGAR:
  S. 1733. A bill to require the Commissioner of Social Security and 
food stamp State agencies to take certain actions to ensure that food 
stamp coupons are not issued for deceased individuals; to the Committee 
on Agriculture, Nutrition, and Forestry.


                  THE FOOD STAMP FRAUD PREVENTION ACT

  Mr. LUGAR. Mr. President, I rise today to introduce a bill to combat 
fraud and waste in the food stamp program--in this case, the fraud and 
waste results from deceased individuals being counted as food stamp 
recipients. At my request, the General Accounting Office (GAO) has 
recently completed an inquiry into groups of ineligible persons being 
counted as food stamp recipients. In the report being released today, 
GAO reported that 26,000 deceased individuals in four states were on 
the food stamp rolls. My bill will require the Social Security 
Administration to share information from its Death Master file with 
state food stamp agencies to verify that no deceased individuals are 
counted as members of food stamp households, either increasing a 
households' benefits or allowing an individual to illegally receive 
benefits in the deceased person's name.
  Last year, GAO reported to the Agriculture Committee that over $3 
million in food stamp benefits were being overpaid to prisoners' 
households. In response, we passed legislation to stop prisoners from 
receiving payments. In follow-up to the prisoner study and legislation, 
I requested that GAO determine if other ineligible individuals were 
similarly being counted as members of food stamp households. Today

[[Page S1698]]

GAO will release the details of their study showing that, over a 2-year 
period, about 26,000 deceased individuals in the four states examined 
(California, Texas, New York, and Florida) were counted as members of 
food stamp households. According to GAO, this resulted in overpayments 
of food stamp benefits of an estimated $8.6 million in four states 
alone.
  Current law requires that households notify their local welfare 
office of any changes in the makeup of the household within ten days. 
The GAO report showed that the deceased individuals were counted in 
food stamp households for an average of four months; and, in a few 
instances, the deceased individuals were counted as beneficiaries for 
the full two years the review was conducted. This is unacceptable 
particularly since this type of fraud can easily be prevented.
  Mr. President, one federal agency has the information to prevent this 
fraud and abuse, but is not sharing it with other agencies issuing 
federal benefits. The Social Security Administration (SSA) has a Death 
Master File that compiles death information from a wide variety of 
sources and is considered the most comprehensive list of death 
information available in the federal government. According to the GAO, 
a match using SSA's Death Master File information could be a cost-
effective method for identifying such individuals in food stamp 
households and eliminating these overpayments. States already rely on 
the SSA to verify the social security numbers of food stamp applicants. 
Therefore, a system already exists in one branch of the federal 
government that, with some modifications, could stop these 
overpayments.
  Although the Social Security Administration agrees that a portion of 
their death information can be shared with the states and the 
Department of Agriculture for food stamp program purposes, in SSA's 
comments to GAO it does not believe it has the authority, under current 
law, to share all of the death information. Therefore, I am introducing 
legislation that will require the Commissioner of SSA to establish 
cooperative arrangements with each state agency that administers the 
food stamp program that will allow the sharing of all death data. My 
bill then requires the food stamp program to provide the information 
necessary for the Commissioner to verify that no deceased individual is 
being counted as part of a food stamp household.
  The Food Stamp program provides a safety net for millions of people. 
We cannot allow fraud and abuse to undermine the food stamp program. 
Integrity is essential to ensure a program that can serve those in 
need. It is Congress' responsibility to play a role in ending fraud and 
abuse in all federally funded programs. This legislation is an 
important step in ending fraud and abuse in the Food Stamp program.
  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. 1733

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

     SECTION 1. NOTIFICATION OF CERTAIN STATE AGENCIES BY 
                   COMMISSIONER OF SOCIAL SECURITY OF DECEASED 
                   INDIVIDUALS.

       (a) In General.--Section 205(r) of the Social Security Act 
     (42 U.S.C. 405(r)) is amended by adding at the end the 
     following:
       ``(8)(A) The Commissioner shall establish a cooperative 
     arrangement with each State agency that administers the food 
     stamp program established under the Food Stamp Act of 1977 (7 
     U.S.C. 2011 et seq.).
       ``(B) Under the arrangement in subparagraph (A), the State 
     agency shall provide information to the Commissioner, in such 
     form and manner as the Commissioner determines necessary, 
     regarding individuals receiving benefits under the food stamp 
     program.
       ``(C) The Commissioner shall compare information received 
     under subparagraph (B) with information obtained under 
     paragraph (1) and notify the State agency of the individuals 
     who are deceased.
       ``(D) An arrangement under subparagraph (A) shall meet the 
     requirements of paragraph (3)(A).''.
       (b) Report.--Not later than 180 days, 1 year, and 18 months 
     after the date of enactment of this Act, the Commissioner of 
     Social Security shall submit a report regarding the progress 
     and effectiveness of the cooperative arrangements established 
     with State agencies under section 205(r)(8) of the Social 
     Security Act (42 U.S.C. 405(r)(8)) to--
       (1) the Committee on Agriculture of the House of 
     Representatives;
       (2) the Committee on Agriculture, Nutrition, and Forestry 
     of the Senate;
       (3) the Committee on Ways and Means of the House of 
     Representatives;
       (4) the Committee on Finance of the Senate; and
       (5) the Secretary of the Treasury.
       (c) Amendment of Internal Revenue Code of 1986.--Clause 
     (ii) of subparagraph (B) of section 6103(d)(4) of the 
     Internal Revenue Code of 1986 (relating to the availability 
     and use of death information) is amended by inserting ``or, 
     in the case of a food stamp program established under the 
     Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), State 
     agency'' after ``agency''.

     SEC. 2. PROVISION OF INFORMATION TO ENSURE NONISSUANCE OF 
                   FOOD STAMP COUPONS FOR DECEASED INDIVIDUALS.

       Section 11(e)(20) of the Food Stamp Act of 1977 (7 U.S.C. 
     2020(e)(20)) is amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) to provide such information to the Commissioner of 
     Social Security as the Commissioner determines is necessary 
     to enable the Commissioner to use the information provided 
     under the arrangement established under section 205(r)(8) of 
     the Social Security Act (42 U.S.C. 405(r)(8)) to verify and 
     otherwise ensure that coupons are not issued for deceased 
     individuals;''.

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by this Act take effect on 
     the date that is 180 days after the date of enactment of this 
     Act.
                                 ______
                                 
      By Mr. WARNER (for himself and Mr. Robb):
  S. 1735. A bill to allow the National Park Service to acquire certain 
land for addition to the Wilderness Battlefield, as authorized by 
Public Law 102-541, by purchase or exchange as well as by donation; to 
the Committee on Energy and Natural Resources.


                 longstreet's flank attack legislation

  Mr. WARNER. Mr. President, I rise today to introduce legislation 
which will preserve a site of great historical importance. The legacy 
of Civil War battlefields must be perpetuated, not only to commemorate 
those who lost their lives in this tragic epoch, but also to consecrate 
land upon which some of our country's finest strategic maneuvers 
occurred. On the hallowed land of Wilderness, VA occurred one of the 
greatest tactical stratagems in military history. Snatching the 
initiative to turn the tide of battle, Lt. Gen. James A. Longstreet, 
under the command of Gen. Robert E. Lee, forced back Union forces 
directed by Gen. Ulysses S. Grant, in an advance known as 
``Longstreet's Flank Attack.''
  Mr. President, this legislation will allow the Park Service to 
acquire this stretch of land, which will serve to complete Wilderness 
Battlefield. The legacy of the Civil War is far-reaching. A war which 
wrought such destruction has been the source of much fascination for 
scholars and amateur historians. The Battle of Wilderness is legendary 
for the tactical skills employed and the caliber of the soldiers who 
fought. There, among the tangled forests and twisted undergrowth, the 
Union Army, numerically superior and well supplied, were forced into 
confrontation with General Lee's hardscrabble Confederate troops. It 
would be one of the last battles in which Lee's incomparable martial 
machine would force Grant's Army of the Potomac to withdraw. It is also 
the site of the wounding of General Longstreet, who, like Gen. 
Stonewall Jackson, was wounded by friendly fire. Though Longstreet's 
injury was not mortal, the genius of the cadre of officers under the 
command of Lee dwindled. Thus would begin the twilight of the 
Confederacy.
  Legislation passed in the 102d Congress would have allowed the Park 
Service to acquire this land by donation. Despite numerous efforts, the 
Park Service has been unable to accomplish this. The legislation at 
hand would amend Public law 102-541 to allow the Park Service to 
procure the land by purchase or exchange as well as donation. The 
heritage and history which dwell amongst the interlaced undergrowth of 
this land deserve our recognition. I look forward to the swift passage 
of this bill.
                                 ______
                                 
      By Mr. ROBB:
  S. 1736. A bill to authorize the Secretary of Transportation to issue 
a certificate of documentation with appropriate endorsement for 
employment in the coastwise trade for vessel Betty Jane; to the 
Committee on Commerce, Science, and Transportation.

[[Page S1699]]

                      jones act waiver legislation

  Mr. ROBB. Mr. President, I am introducing a bill today to authorize 
the Coast Guard to issue the appropriate endorsement for the vessel 
Betty Jane Virginia Registration number VA 7271 P to engage in the 
coastwise trade and fisheries. This legislation is necessary to resolve 
an issue regarding official documentation of the Betty Jane's chain of 
title.
  The Betty Jane was built in the United States in Deltaville, Virginia 
by an American private boat builder in 1970. It is a 36-foot wood hull, 
in-board gas propulsion boat, which is planned to be used for the 
excursion tourboat trade. The builder and the only former boat owner 
are deceased. The lack of an appropriate affidavit from these persons 
has left a gap in the chain of title of the vessel. The Coast Guard has 
informed the owner of the Betty Jane that if the gap is left 
unresolved, a coastwise endorsement cannot be issued for the vessel, 
even though the present owner is a U.S. citizen, the only former owner 
was a U.S. citizen, and the vessel was built in the United States.
  The Congress passes a number of these technical bills every year. I'm 
introducing this bill today so that the Senate Commerce Committee may 
act upon it with the upcoming coastwise bill this session.
                                 ______
                                 
      By Mr. MACK (for himself, Mr. Kerrey, Mr. Nickles, Mr. Conrad, 
        Mr. Grassley, Ms. Moseley-Braun, Mr. Breaux, Mr. Craig, Mr. 
        Coverdell, Mr. McConnell, Mr. Thurmond, Mr. Murkowski, Mr. 
        Bond, Mr. Lugar, Mr. Ashcroft, Mr. DeWine, and Mr. Abraham):
  S. 1737. A bill to amend the Internal Revenue Code of 1986 to provide 
a uniform application of the confidentiality privilege to taxpayer 
communications with federally authorized practitioners; to the 
Committee on Finance.


                the taxpayer confidentiality act of 1998

  Mr. MACK. Mr. President, I rise to introduce the Taxpayer 
Confidentiality Act of 1998. This bill corrects an inequity in the way 
that taxpayers are treated by the IRS. Under current law, 
communications between taxpayers and their lawyers concerning tax 
advice can often be protected from disclosure to the IRS by the common 
law attorney-client privilege.
  Many taxpayers choose to obtain their tax advice from practitioners 
who are not attorneys. Under federal law, there are other categories of 
tax practitioners to whom these taxpayers can turn for tax advice--
certified public accountants, enrolled agents, enrolled actuaries, and 
attorneys providing advice in the role of a tax practitioner. These tax 
practitioners are subject to federal regulation, and are authorized to 
provide tax advice and to represent taxpayers before the IRS.
  But under current law, communications with these other tax 
practitioners cannot be protected from disclosure to the IRS by a 
client privilege. The very same words on the very same piece of paper 
that would be beyond the reach of the IRS if they were the advice of an 
attorney at law would have to be turned over to the IRS if they came 
from a certified public accountant or an enrolled agent. This is an 
unfair penalty to impose on a taxpayer based on their choice of tax 
advisor, particularly since many taxpayers do not have the financial 
resources to hire legal counsel.
  The Taxpayer Confidentiality Act of 1998 fixes this unjust situation, 
and provides taxpayers with the confidence of knowing that their tax 
advice communications with any federally-authorized tax practitioners 
are afforded equal confidentiality protections in dealings with the 
IRS.
  This bill does not unduly restrict the ability of the IRS to gather 
information. The IRS will still be able to discover the facts. The 
taxpayer can protect from disclosure only tax advice communications 
that would be protected by the attorney-client privilege if the advisor 
were acting as an attorney. The client privilege extends only to 
communications and does not cover the taxpayer's business records. 
Also, courts have widely held that information used to prepare a tax 
return is not subject to a privilege and thus, under the Act, would 
remain subject to disclosure.
  The bill will not hinder criminal investigations and prosecutions, as 
taxpayers can assert the privilege only in noncriminal matters before 
the IRS and noncriminal judicial proceedings arising from these 
matters. And existing exceptions to the attorney-client confidentiality 
privilege would also apply to the protections under the bill. Thus, 
communications in the furtherance of a crime or a fraud would not be 
protected.
  And the bill does not affect the ability of anyone other than the 
IRS--including other federal or state agencies, and private individuals 
involved in civil litigation--to obtain access to information that they 
have the right under current law to obtain. It is just a narrowly-
tailored, common-sense solution to the problem of treating taxpayers 
differently based on the tax advisor they employ. Taxpayers should have 
a right to privacy in the tax advice they receive from qualified tax 
practitioners.
  The Taxpayer Confidentiality Act of 1998 does not modify the 
attorney-client privilege in any way, and does not expand the authority 
of federally-regulated tax practitioners in any way. It merely provides 
equal treatment for all taxpayers who receive tax advice from 
federally-authorized sources. The Act curbs unwarranted IRS 
intrusiveness, and must be included in our IRS reform efforts.
  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. 1737

       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 ``Taxpayer Confidentiality Act 
     of 1998''.

     SEC. 2. UNIFORM APPLICATION OF CONFIDENTIALITY PRIVILEGE TO 
                   TAXPAYER COMMUNICATIONS WITH FEDERALLY 
                   AUTHORIZED PRACTITIONERS.

       (a) In General.--Chapter 77 of the Internal Revenue Code of 
     1986 (relating to miscellaneous provisions) is amended by 
     adding at the end the following new section:

     ``SEC. 7525. UNIFORM APPLICATION OF CONFIDENTIALITY PRIVILEGE 
                   TO TAXPAYER COMMUNICATIONS WITH FEDERALLY 
                   AUTHORIZED PRACTITIONERS.

       ``(a) General Rule.--With respect to tax advice, the same 
     common law protections of confidentiality which apply to a 
     communication between a taxpayer and an attorney shall also 
     apply to a communication between a taxpayer and any federally 
     authorized tax practitioner if the communication would be 
     considered a privileged communication if it were between a 
     taxpayer and an attorney.
       ``(b) Limitations.--Subsection (a) may only be asserted 
     in--
       ``(1) noncriminal tax matters before the Internal Revenue 
     Service, and
       ``(2) noncriminal proceedings in Federal courts with 
     respect to such matters.
       ``(c) Federally Authorized Tax Practitioner.--For purposes 
     of this section, the term `federally authorized tax 
     practitioner' means any individual who is authorized under 
     Federal law to practice before the Internal Revenue Service 
     if such practice is subject to Federal regulation under 
     section 330 of title 31, United States Code.''
       (b) Conforming Amendment.--The table of sections for such 
     chapter 77 is amended by adding at the end the following new 
     item:

``Sec. 7525. Uniform application of confidentiality privilege to 
              taxpayer communications with federally authorized 
              practitioners.''

       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.
                                 ______
                                 
      By Mr. ABRAHAM:
  S. 1738. A bill to amend the National Sea Grant College Program act 
to exclude Lake Champlain from the definition of the Great Lakes, which 
was added by the National Sea Grant College Program Reauthorization Act 
of 1998; to the Committee on Commerce, Science, and Transportation.


                        great lakes legislation

  Mr. ABRAHAM. Mr. President, I rise today to introduce legislation to 
reverse the recent designation of Lake Champlain as a ``Great Lake.''
  Mr. President, I was extremely pleased to be an original cosponsor of 
the Sea Grant College Program Act, an important piece of legislation 
which supplies crucial funding for programs targeted at zebra mussel 
research and control. This Act is extremely important to the Great Lake 
states, which suffer considerably from zebra mussel infestation.
  Late last year, the Sea Grant College Program Act was amended to 
allow

[[Page S1700]]

Vermont Universities to apply for grants related to zebra mussel 
programs. This amendment, which designated Vermont's Lake Champlain a 
Great Lake, was never offered in Committee for consideration. Nor was 
it shared with the Great Lakes Task Force, whose Members would have 
been very interested in reviewing it.
  This was unfortunate, Mr. President, because that Lake Champlain 
suffers greatly from zebra mussel infestations and needs help. Let me 
make clear, I am not opposed to allowing Vermont Universities to apply 
to the Sea Grant program. Lake Champlain has a very real zebra mussel 
problem and it should be addressed. Michiganians can understand and 
empathize with Vermont's efforts to battle this invader.
  However, I am troubled by the approach taken to achieve funding for 
zebra mussel programs in Vermont. Rather than asking for language which 
would specifically allow Vermont Universities to apply for Sea Grant 
dollars, the definition of a Great Lake was changed to include Lake 
Champlain when, clearly, it is not. Lake Ontario, covering over 7,300 
square miles, is the smallest of the Great Lakes. It is almost 17 times 
the size of Lake Champlain and twice as deep. Lake Superior, the 
largest of the Great Lakes, is over 70 times the size of Lake 
Champlain. Clearly Vermont's lake is not a member of this elite class.
  For that reason, Mr. President, I have introduced this legislation to 
reverse the designation of Lake Champlain as a Great Lake. I would 
support language that specifically allows Vermont to apply for Sea 
Grant assistance, but I cannot agree to language changing the 
definition of a Great Lake, even for such a limited purpose. 
Notwithstanding assurances to the contrary, I believe such an action 
could lead to a host of unintended consequences and even serve as the 
basis for states outside the region to push for participation in a 
number of substantial Great Lakes issues. In addition, I oppose 
defining Lake Champlain as a Great Lake in the interest of clarity and 
truth. To call Lake Champlain a Great Lake is sheer nonsense.
  The legislation I have introduced will amend the definition to state 
that only the Great Lakes, Superior, Michigan, Huron, Erie and Ontario 
are to be defined as Great Lakes. I hope that we can resolve this soon 
and put this entire matter to rest.
  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. 1738

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

     SECTION 1. DEFINITION OF GREAT LAKES FOR NATIONAL SEA GRANT 
                   COLLEGE PROGRAM ACT.

       Section 203 of the National Sea Grant College Program Act 
     (33 U.S.C. 1122) is amended in paragraph (5), as added by 
     section 4(a)(3) of the National Sea Grant College Program 
     Reauthorization Act of 1998, by striking ``includes Lake 
     Champlain'' and inserting ``applies to Lake Superior, Lake 
     Michigan, Lake Huron, Lake Erie and Lake Ontario''.
                                 ______
                                 
      By Mr. FRIST (for himself and Mr. Rockefeller):
  S. 1739. A bill to establish a commission, under the aegis of the 
National Science Foundation, to review and propose recommendations for 
assuring United States leadership in science and mathematics; to the 
Committee on Labor and Human Resources.


   the national commission for science and mathematics leadership act

  Mr. FRIST. Mr. President, I rise today to announce the establishment 
of the National Commission for Science and Mathematics Leadership. This 
effort is a direct result of the United States' devastating performance 
of 12th grade students on the recently released Third International 
Mathematics and Science Study (TIMSS), the most comprehensive and 
rigorous comparison of quantitative skills across nations. If we, as a 
nation, are going to continue to be global leaders in the new 
knowledge-based economy, we must first re-evaluate our current failures 
in our classrooms. I concur with Secretary Daley when he stated, 
``These results are entirely unacceptable.''
  TIMSS was designed to constructively assess the students' knowledge 
of mathematics and science needed to function effectively in society as 
adults. American 12th graders were outperformed in mathematics and 
science literacy by their counterparts in 12 of 20 countries, and only 
faired better than 2, Cypress and South Africa. In advanced mathematics 
and physics, no country performed more poorly. We simply cannot accept 
the conclusion of this study without considering its consequences on 
our entire educational system.
  The 4th grade TIMSS measurement indicated that the American students 
are well above the international average in mathematics and very near 
the top in achievement in science. However, the United States Is the 
only country in TIMSS whose students dropped in ranking from above 
average in mathematics at the fourth grade level to slightly below 
average performance at the eighth grade. And it only gets worse. Why 
does this drop-off occur? American students start out equal with or 
ahead in basic skills and steadily decline the longer they stay in 
school, compared with the students of our country's main trading 
partners.
  Our children cannot afford to be illiterate in mathematics and 
science. The rapidly changing American society demands skills requiring 
mathematics, science, and technology. Information Technology, perhaps 
the fastest growing sector of our economy with 90% of new jobs, relies 
on more than basic high school literacy in mathematics and science.
  The National Commission on Science and Mathematics Leadership is a 
first step toward improving our current educational system. It is a 
solid commitment from Congress to establish a core of national experts 
to review and propose recommendations for assuring leadership in 
science and mathematics training in the United States. Furthermore, 
using TIMSS as a comprehensive and valuable tool, the Commission, in 
coordination with the National Academy of Sciences, will analyze the 
results of this international study to better our schools, and more 
importantly, the future of our children.
  Mr. ROCKEFELLER. Mr. President, I rise today to join my colleague 
Senator Frist in introducing legislation to authorize the National 
Science Foundation to form a commission to review and propose 
recommendations for assuring the United States leadership in science 
and mathematics. This bill would require the formation of a 12 member 
commission of experts in the field of science and mathematics 
education. The commission is charged with reviewing the recently 
released Third International Mathematics and Science (TIMSS) study 
results, along with whatever other relevant information they need to 
assess the state of science and mathematics education in the United 
States, and reporting back to Congress with a set of recommendations 
for implementation by public and private agencies; these 
recommendations would serve to allow United States students to become 
preeminent among the nations of the world.
  As everyone in the Senate knows, I have been a long and ardent 
supporter of education. That is why I read with such dismay the recent 
TIMSS study results which show United States students behind every 
major industrialized nation in the study. This is an unacceptable 
situation. The United States' economy is becoming increasingly 
dependent on high-technology, information management, and intellectual 
ability rather than raw materials, natural resources and muscle power. 
It is imperative that our high-school graduates--whether they go on to 
college, post-secondary technical training, or move straight into the 
workforce--have a solid foundation of science and mathematics 
education. A recent study suggests that 60 percent of positions require 
some sort of computer skills, while only 22 percent of today's workers 
have applicable skills. We can not let this inequality continue to 
future generations.
  Unfortunately the TIMSS study results show that we are setting up our 
students to fail. We need to identify, and work diligently to 
implement, means to correct this situation. The commission formed by 
this bill is a needed first step. I encourage my colleagues to support 
this bill.
                                 ______
                                 
      By Ms. COLLINS (for herself and Mr. Durbin):
  S. 1740. A bill to amend the Communications Act of 1934 to improve 
the

[[Page S1701]]

protections against the unauthorized change of subscribers from one 
telecommunications carrier to another, and other purposes; to the 
Committee on Commerce, Science, and Transportation.


             the telephone slamming prevention act of 1998

  Ms. COLLINS. Mr. President, today I am introducing a bill to curtail 
a fraudulent practice known as slamming--the unauthorized change of a 
customer's telephone service provider. Telephone slamming is a 
widespread and growing problem. In Maine, for example, slamming 
complaints to the local telephone company increased by 100% from 1996 
to 1997. Nationwide, slamming is also the number one telephone-related 
complaint to the FCC. While the FCC received a total of more than 
20,000 slamming complaints in 1997, a significant increase over the 
previous year, estimates from phone companies indicated that as many as 
one million people were slammed last year.
  Last fall, the Permanent Subcommittee on Investigations, which I 
chair, undertook an extensive investigation of the slamming problem. On 
February 18th, I chaired a field hearing on slamming in Portland, 
Maine. My distinguished colleague, Senator Richard Durbin, joined me at 
the hearing, and we heard first-hand from several consumers about the 
problems they experienced with telephone slamming.
  At the Subcommittee hearing, Maine slamming victims explained how 
some long-distance companies used fraudulent or deceptive practices to 
change their telephone service. Witnesses used words such as 
``stealing,'' and ``criminal,'' and ``break-in'' to describe practices 
employed by unscrupulous telephone companies to switch unsuspecting 
customers and boost profits.
  One witness, Pamela Corrigan from West Farmington, Maine, testified 
that she was sent an unsolicited ``welcome package'' in the mail, which 
looked like the stacks of junk mail that we receive every day. However, 
this ``junk mail'' was not what it appeared to be. This ``welcome 
package'' automatically signed her up for a new long distance service 
unless she returned a card rejecting the change. She was amazed and 
appalled that it was possible for a company to change her long distance 
service simply because she did not respond that she did not want their 
service.
  Another witness, Susan Deblois from Winthrop, Maine, testified that 
when she was slammed, her children were unable to use the 800 number 
she had for them to call home in case of an emergency.
  Slamming not only affects families but also small businesses and 
communities. For example, Steve Klein, the owner of Mermaid 
Transportation Company in Portland, Maine, testified that his business 
phone lines, which are critical to his livelihood, were tied up for 
four days which he was slammed by a long-distance telephone reseller 
which falsely represented itself as AT&T.
  Similarly, Ms. Corrigan, who is the town manager of Farmington, 
Maine, reported that the town's phone lines were also slammed. Simply 
put, Mr. President, no one is immune from this illegal activity.
  Victims of slamming are frustrated. They are angry. They should not 
have to spend their time and energy resolving problems that are not of 
their own making. People rely on their home and business telephone 
service, and they should be able to choose their own long-distance 
company without fear that their decision will be changed without their 
consent.
  Deliberate slamming is like stealing and should not be tolerated. The 
FCC must step up enforcement efforts to make sure that existing laws 
and regulations are followed by telephone companies, and Congress must 
act to strengthen penalties to halt this pernicious practice.
  The comprehensive legislation that I am introducing today, along with 
my colleague Senator Durbin, will attack the problem of slamming from 
all sides.
  First, the bill gets tough with those who engage in deliberate 
slamming. It would increase civil penalties and establish new criminal 
penalties for intentional slamming. Specifically, civil penalties would 
be increased to a minimum of $50,000 for the first slamming offense and 
$100,000 for a subsequent offense.
  Criminal penalties would be established for intentional slamming, the 
same as those for any other federal crime: a maximum of $100,000 and 
one year imprisonment for a misdemeanor and $250,000 and five years 
imprisonment for a felony. In addition, anyone convicted of intentional 
slamming will be disqualified from being a telecommunications service 
provider. The bill would also allow the states to bring action in 
federal court against slammers on behalf of its residents, a provision 
suggested by Senator Durbin.
  Second, our legislation increases consumer protection. It would give 
control back to consumers by taking the financial incentive away from 
companies that engage in slamming. Rather than paying the slamming 
company, consumers could pay their original carrier at their previous 
rate. It would further protect consumers by eliminating the so-called 
``welcome package'' method of verification, a favorite tool of 
slammers, which is misused and deceptive.
  Third, the bill strongly encourages the FCC to step up its 
enforcement efforts against slamming. It would require local telephone 
companies to report a summary of slamming complaints to the FCC for 
further investigation, and it would require the FCC to report to 
Congress on its enforcement actions against slammers.
  Finally, the legislation would require the FCC to report to Congress 
on whether or not its current procedures contain sufficient safeguards 
to prevent unscrupulous telecommunications providers from receiving an 
FCC license in the first place.
  Mr. President, consumers have lost control over their 
telecommunications service to unscrupulous providers. The Collins-
Durbin legislation would go a long way toward halting slamming. I urge 
my colleagues to join me in the fight against slamming by co-sponsoring 
the ``Telephone Slamming Prevention Act of 1998.''
  For the information of all my colleagues, I ask unanimous consent to 
include in the Record a detailed summary of the provisions contained in 
this comprehensive anti-slamming bill.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

          Summary of Telephone Slamming Prevention Act of 1998

       (1) Clarification of Verification Procedures: The bill 
     amends current law, which allows the FCC to determine the 
     verification procedures that telecommunications carriers can 
     use when executing a change in subscriber service, to place 
     some restrictions on the approved verification methods. 
     Specifically, this provision will eliminate the ``welcome 
     package'' method of verification. It will still allow the FCC 
     to determine the appropriate forms of verification and the 
     time and manner in which such verification must be retained 
     by carriers.
       (2) Liability for Charges: The bill also allows subscribers 
     who have been slammed, and who have not yet paid their 
     telephone bill to the unauthorized carrier, to pay their 
     original carrier for their phone usage, at the rate they 
     would have been charged by their original carrier. The 
     provision will not change existing law and FCC regulations 
     that make the slamming carrier liable to the original carrier 
     for any charges it collects from a slammed subscriber. This 
     provision is designed to take away the financial incentive 
     for slamming.
       (3) Additional Penalties: The bill also increases the civil 
     penalties for slamming and creates criminal penalties.
       The civil penalties provision will require the FCC to 
     assess a minimum of $50,000 for the first slamming offense, 
     and $100,000 for any subsequent offense, unless the 
     Commission determines that there are mitigating 
     circumstances. Currently, the penalty typically assessed by 
     the FCC is only $40,000 for each offense.
       In addition, this provision will allow the Commission, at 
     its discretion, to assess civil penalties against carriers 
     that make unauthorized carrier changes on behalf of their 
     agents or resellers. It will require the Commission to 
     promulgate regulations on the oversight responsibilities of 
     the underlying facilities-based carriers for their agents or 
     resellers. This will make it clear to carriers, who sell 
     access to their telephone lines, that they have some 
     responsibility for the actions of their agents or resellers.
       Currently, slamming is not a crime. The criminal penalties 
     provision will make intentional slamming a misdemeanor for 
     the first offense (not more than one year imprisonment), and 
     a felony for subsequent intentional slamming offenses (not 
     more than five years imprisonment). Criminal fines for 
     intentional slamming are the same as those for any other 
     federal crime: a maximum of

[[Page S1702]]

     $100,000 for a misdemeanor and $250,000 for a felony. In 
     addition, anyone convicted of the crime of intentional 
     slamming will not be allowed to be a telecommunications 
     service provider, and any company substantially controlled by 
     a person convicted of intentional slamming will also be 
     disqualified from providing such services. After five years, 
     however, the FCC shall have the option to reinstate such 
     individuals or companies disqualified under this provision, 
     if it is in the public interest to do so.
       (4) State Actions: The bill gives the states the right to 
     take action against slammers on behalf of its residents, and 
     makes it clear that nothing in this section preempts the 
     states from taking action against intra-state slammers. This 
     provision is necessary because some state supreme courts have 
     ruled that FCC regulatory authority preempts the states from 
     acting in this area.
       (5) Reports on Slamming Complaints: The bill requires all 
     telecommunications carriers, including local exchange 
     carriers, to report on the number of subscriber slamming 
     complaints against each carrier. The provision allows the FCC 
     to determine how often these reports would have to be 
     submitted. This provision would not require carriers to refer 
     complaints on an individual basis, only a summary report that 
     could be used by the FCC to determine which companies are 
     engaging in patterns and practices of slamming.
       (6) FCC Report on Slamming and Enforcement Actions: The 
     bill establishes a requirement that FCC submit a report to 
     Congress on its slamming enforcement actions. The FCC already 
     provides this information in its Common Carrier Scorecard, so 
     this provision does not establish a new report. It is 
     designed to make it clear to the FCC that Congress considers 
     slamming enforcement important.
       (7) FCC Report on Adequacy of FCC License Process: This 
     bill requires the FCC report to Congress on whether current 
     licensing requirements and procedures are sufficient to 
     prevent fraudulent telecommunications providers from 
     receiving an FCC license. Currently, the FCC does not review 
     telecommunications provider applications prior to issuing FCC 
     licenses, allowing fraudulent companies into the 
     telecommunications marketplace.

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