[Congressional Record Volume 144, Number 26 (Thursday, March 12, 1998)]
[Senate]
[Pages S1884-S1893]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. MACK (for himself, Mr. Breaux, Mr. Torricelli, Mr. Lott, 
        Mr. Hatch, Mr. Murkowski, Mr. Dewine, Mr. Hagel, Mr. Kyl, Mr. 
        Abraham, Mr. Ashcroft, Mr. Cochran, and Mr. Helms):
  S. 1748. A bill to amend the Internal Revenue Code of 1986 to provide 
that the reduced capital gains tax rates apply to long-term capital 
gain from property with at least a 1-year holding period; to the 
Committee on Finance.


              THE CAPITAL GAINS SIMPLIFICATION ACT OF 1998

  Mr. MACK. Mr. President, today I am introducing the Capital Gains 
Simplification Act of 1998. This legislation will significantly improve 
the tax treatment of capital gains and would benefit all Americans. It 
would restore the one-year holding period (from the current 18 month 
requirement) to qualify for the lower capital gains tax rates the 
Republican Congress enacted last year. This simple change would 
dramatically reduce tax compliance costs, lessen the punitive lock-in 
effect on capital, and yield additional federal revenue in the first 
two years.
  Capital investment is the key to economic growth and our future 
standard of living. That's why we successfully fought to give the 
American people significant tax relief on their savings and investments 
last year. We reduced the top rate on capital gains from 28 percent to 
20 percent. Typical taxpayers in the 15 percent tax bracket had their 
capital gains tax rate lowered even more--to 10 percent.
  Unfortunately, in order for taxpayers to qualify for lower capital 
gains tax rates, the Clinton Administration dictated an increase in the 
holding period from one year to 18 months when the Taxpayer Relief Act 
of 1997 was in conference. This arbitrary new holding period creates an 
awkward rate structure in which gains held between 12 and 18 months are 
taxed at higher rates. This dramatically and unnecessarily complicates 
tax calculations and compliance costs for taxpayers, investment firms, 
and the IRS.
  For most Americans, their tax accounting and investment changes are 
timed on a one year basis, thus making the new 18-month holding period 
out of sync with investment and tax filing standards. This longer 
holding period also reduces economic efficiency and the flow of capital 
by artificially locking-in investments for longer durations. 
Additionally, Americans who may need to sell an investment before 
holding it 18 months--for instance, to pay a tuition bill or medial 
expense--are punished with higher tax rates under current law. This 
makes little sense and must be corrected.
  My bill would restore a straightforward one-year holding period for 
capital gains. It would greatly simplify the tax compliance burden, 
reduce punitive taxation, and improve economic efficiency. Simply 
stated, it would make it easier and more rewarding for Americans to 
save and invest for their futures.
  New entrepreneurial activity that boosts economic growth takes money, 
and the demands for capital are the greatest they have been in decades. 
New technologies are opening the door to greater productivity gains and 
new products. We must ensure that the adequate savings and investment 
needed to fuel new technologies and productivity gains are available.

  Any tax on capital gains represents punitive double taxation, and 
often taxes illusory gains due simply to inflation. And capital gains 
are not just for the ``rich.'' According to IRS tax return data, 54 
percent of taxpayers reporting capital gains have incomes below 
$50,000--meaning more than 8 million households earning less than 
$50,000 can benefit from the capital gains tax relief Congress provided 
last year. Many senior citizens depend on cashing in their capital 
gains as their major source of income during retirement. More than 80 
percent of capital gains are reported by households with less than 
$100,000 in income.
  It's no secret that a large and growing number of ordinary middle-
income Americans are directly or indirectly invested in the stock 
market. They invest directly by buying shares themselves or indirectly 
through savings in mutual funds, IRA accounts, or pension plans at 
work. The proportion of families who own stocks has increased 
dramatically. By simplifying the tax treatment of capital gains, this 
legislation would encourage families to save even more and would make 
it easier for them to buy a home, prepare for retirement, or pay for 
their children's education.
  Let's not forget that capital gains taxes are largely a voluntary 
tax, since investors decide when they sell their assets. Investors 
should be allowed to freely move their money into new investments 
without paying punitive tax rates due to arbitrary holding periods. 
Locking up capital with longer holding periods can only diminish our 
chances of achieving our greatest growth potential.
  By returning the capital gains holding period to one year, the 
Capital Gains Simplification Act would cut tax compliance costs, but 
more importantly, it would help unleash greater investment 
opportunities, create jobs, and boost growth to the benefit of all 
Americans.
  Mr. President, I ask unanimous consent that this bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1748

       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 ``Capital Gains Simplification 
     Act of 1998''.

     SEC. 2. 1-YEAR HOLDING PERIOD FOR ANY LONG-TERM CAPITAL GAIN.

       (a) In General.--Section 1(h)(4) of the Internal Revenue 
     Code of 1986 (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) of the Internal 
     Revenue Code of 1986 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.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.
                                 ______
                                 
      By Mr. ALLARD (by request):
  S. 1749. A bill to authorize the Secretary of the Interior to provide 
funding for the implementation of the endangered fist recovery 
implementation programs for the Upper Colorado and San Juan River 
Basins; to the Committee on Environment and Public Works.


 the upper colorado river and san juan river endangered fish recovery 
                              act of 1998

  Mr. ALLARD. Mr. President, today I am introducing the Upper Colorado 
River and San Juan River Endangered Fish Recovery Act of 1998, 
legislation that is designed to authorize activities taking place on 
the Upper Colorado River Basin and the San Juan River Basins to protect 
various endangered fish species.
  The legislation is the product of meetings between water districts,

[[Page S1885]]

power users, state and federal governments, and environmental groups 
and by no means reflects consensus. What it does reflect is a 
bargaining point that all agree is the proper place to begin. At the 
request of these groups I am introducing this legislation. I would also 
like to include in the Record letters requesting that I introduce this 
legislation.
  I want my position to be clear, it is my view that authorizing 
legislation should provide certainty to water users in Colorado under 
the Endangered Species Act and should also allow Coloradans a greater 
ability to develop their full allotment of the Colorado River. It's 
also my view that the Fish & Wildlife Service, who are preparing a 
biological opinion on the program, should reach the conclusion that the 
program meets the criteria necessary to reach that goal.
  So while at this point I am only introducing this legislation upon 
request, I hope that after further negotiations among all parties and 
the biological opinion issued by the FWS all parties involved will 
support this, or subsequent, legislation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                             Southeastern Colorado


                                   Water Conservancy District,

                                     Pueblo CO, February 24, 1998.
     Re Upper Colorado River Endangered Fish Recovery Program--
         Authorizing Legislation.

     Hon. Wayne Allard,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Allard: As we discussed during your visit to 
     Pueblo last week (February 19th), the Southeastern District 
     did not join other water users in signing the Upper Colorado 
     River Basin Water Users February 13th letter supporting the 
     introduction of authorizing legislation for the long-term 
     funding of the Colorado River Endangered Fish Recovery 
     Program. We now wish to voice our support for introduction of 
     the proposed legislation, but ask that you consider the 
     Southeastern District's concerns while moving the bill 
     through the process.
       While we are supporting introduction at this time, we do so 
     with some measure of concern. Prior to our February 19th 
     meeting, the Board of the District has held the position that 
     before authorizing legislation is introduced the fish and 
     Wildlife Service should first issue a favorable biological 
     opinion (BO) stating that the Recovery Program does indeed 
     serve as the reasonable and prudent alternative for all water 
     projects diverting above the upper Colorado River 15-mile 
     reach. That BO is not yet complete, so uncertainty still 
     exists. In addition, the District has been cautious in our 
     support for the Recovery Program because one of the key 
     elements of the Program requires a commitment of water from 
     Ruedi Reservoir, which is a component of the Fryingpan-
     Arkansas Project.
       The commitment of water from Ruedi Reservoir to augment 
     flows in the 15-mile reach for endangered fish has not yet 
     been positively resolved, which is the major reason why the 
     Southeastern District has resisted the introduction of 
     Recovery Program legislation. The Fish & Wildlife Service has 
     made it clear that they want a permanent allocation of Ruedi 
     Water, or water from another source, to meet the objectives 
     under the Recovery Program. Such a re-allocation of water may 
     mean that the original authorizing legislation from the Fry-
     Ark Project (Public Law 87-590, August 16, 1962) would need 
     to be reopened in order to forgive the costs of construction 
     associated with the Ruedi water, and possibly to authorize 
     the transfer of the water from the intended irrigation and 
     M&I use to endangered fish use.
       As you will understand, the Southeastern District is 
     concerned with re-opening our Fry-Ark Project authorizing 
     legislation without some guarantee that our full entitlements 
     for irrigation and M&I water deliveries, and other benefits 
     under the Project, will be protected.
       Given these concerns, the District had heretofore withheld 
     our support for the introduction of Recovery Program long-
     term funding authorization legislation. We now ask that the 
     legislation move forward under your leadership. However, our 
     continued support for the legislation in the months to come 
     will in part be contingent upon the positive resolution of 
     the Ruedi Reservoir water commitment element of the Recovery 
     Program, and the issuance of a favorable programmatic 
     biological opinion.
       Thank you for considering our concerns as a part of your 
     work on this important piece of legislation.
           Sincerely,
                                                Steven Aryeschoug,
     General Manager.
                                                                    ____

                                            State of Colorado,    
                                 Office of the Executive Director,


                              Department of Natural Resources,

                                    Denver, CO, February 25, 1998.
     Hon. Wayne Allard,
     Hart Building, Washington, DC.
       Dear Sen. Allard: I am writing to ask you to introduce 
     legislation to statutorily authorize the federal government's 
     participation in the Recovery Implementation Program for 
     Endangered Fish Species in the Upper Colorado River Basin and 
     the San Juan River Recovery Implementation Program (Recovery 
     Programs).
       These programs allow water development to proceed while 
     states, water users, environmental groups and Indian tribes 
     work with federal agencies to recover four endangered fish 
     species. However, if the recovery programs are really to 
     achieve their intended purposes, clear statutory authority is 
     needed to help ensure that funds will continue to be 
     requested by the Department of the Interior and appropriated 
     by Congress.
       Water users have assisted officials from Colorado, New 
     Mexico, Utah and Wyoming to draft legislation that will 
     provide the needed authority.
       However, Colorado water users recognize that statutory 
     authority alone will not make the programs successful. As a 
     result, they have been working with me to clarify how the 
     Upper Colorado River program and the U.S. Fish and Wildlife 
     Service will address future depletions in the 15-mile reach 
     of the Colorado River near Grand Junction.
       It is my understanding that water users support the 
     introduction of legislation while these negotiations continue 
     and may withdraw their support at any time. Introducing 
     legislation now would also allow Congress to exercise some 
     programmatic oversight and tailor the legislation to reflect 
     agreements reached through the 15-mile reach discussions.
       I hope that you will introduce this legislation and 
     continue to support the efforts of water users to ensure the 
     recovery program continues to offer the best opportunity to 
     address water needs and environmental obligations to the arid 
     West.
           Very truly yours,
                                               James. S. Lochhead,
     Executive Director.
                                                                    ____

                                              Upper Colorado River


                                            Basin Water Users,

                                  Loveland, CO, February 13, 1998.
     Hon. Wayne Allard,
     U.S. Senate, Washington, DC.
       Dear Senator Allard: Thank you for circulating a draft 
     legislation that would authorize long-term funding for the 
     Colorado River Endangered Fish Recovery Program. We have 
     reviewed the draft that was attached to your letter of 
     November 14, 1997, and believe that this legislation should 
     receive further consideration by all interested parties. As 
     is often the case with legislation, of this nature, none of 
     the organizations that we represent are prepared to endorse 
     this particular draft, and all of the interested parties have 
     served their right to suggest amendments to or withdraw 
     support for legislation. However, we support the introduction 
     of this legislation at this time, as we believe that the 
     hearing and markup process will provide the best way to 
     resolve the remaining issues.
       Thank you for taking the time to work on this important 
     issue.
           Sincerely,
         H.J. Barry, Denver Water Department; Eric W. Wilkinson, 
           Northern Colorado Water Conservancy, Resources 
           District; Larry W. Clever, Ute Water Conservancy 
           District; Cliff Inbau, City of Aurora Utilities; 
           Gregory Trainor, Utility Manager, City of Grand 
           Junction; Dale Tooker, Manager, Clifton Water District; 
           Richard E. Kuhn, Colorado River Conservation District; 
           Philip Saletta, Colorado Springs Utilities, Water 
           Department; Richard Proctor, Manager, Grand Valley 
           Water Users' Association; James D. Rooks, Orchard Mesa 
           Irrigation District; John R. Fetcher, Upper Yampa Water 
           Conservation District; and Alan C. Hamel, Board of 
           Water Works of Pueblo.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself and Mr. Domenici):
  S. 1750. A bill to amend section 490 of the Foreign Assistance Act of 
1961 to establish an additional certification with respect to major 
drug-producing and drug-transit countries, and for other purposes; to 
the Committee on Foreign Relations.


         mexico and the drug certification process legislation

  Mr. DOMENICI. Mr. President, I am pleased to rise today with the 
distinguished junior Senator from Texas (Mrs. Hutchison) to introduce a 
bill to bring some much needed credibility and flexibility to the drug 
certification process.
  As my colleagues are aware, the President recently announced his 
annual decision regarding which countries would be certified as ``fully 
cooperating'' with the United States in the drug war. Once again, in 
the face of overwhelming evidence that full certification was 
unwarranted, the President found that Mexico has fully cooperated. This 
decision essentially means that the President has announced to the 
American people and

[[Page S1886]]

the world that Mexico is a full partner in our anti-narcotics efforts.
  Mr. President, I understand that Mexico has made some progress in 
recent years in combating the drug cartels. And for that, the Mexican 
government deserves some credit. But, I simply cannot accept the 
Administration's flawed decision that Mexico has fully cooperated with 
the United States. There were too many instances of drug-related 
corruption and violence in the past year which support the opposite 
conclusion--that Mexico deserves something less than full 
certification.
  Mr. President, I could take all day to explain to my colleagues in 
the Senate why I believe that Mexico does not deserve full 
certification this year. Instead, I would like to point out a just few 
facts which lead me to that conclusion.
  First, I would direct my colleagues to a Washington Post article 
dated March 9th--just this week--entitled ``2,000 Miles of Disarray in 
the Drug War--U.S./Mexico Border Effort `A Shambles.' '' The article 
points out what I think everyone, including the President of the United 
States, knows about our border drug effort with Mexico: it simply has 
been a failure.
  The article notes that despite the official rhetoric from Washington 
praising Mexico's cooperation, U.S. law enforcement officials on the 
ground are saying that the joint U.S.-Mexico effort to establish 
Bilateral Border Task Forces to combat the drug cartels has been a 
disaster. I think the time has come for Congress and the President to 
pay more attention to what our law enforcement officials at the front 
lines of the drug war are saying about Mexico and its level of 
cooperation. It's clear the views of law enforcement are far different 
than those of the diplomats at the State Department and the embassies.
  According to the news article, for the past 14 months, DEA, FBI and 
Customs agents have refused to cross the border into Mexico because 
Mexico will not allow them to carry weapons to protect themselves. 
These agents were supposed to be the front line in the U.S. 
contribution to the joint border effort, but Mexico's unwillingness to 
allow them even the most basic protections has rendered our agreement 
to work together meaningless.
  The news story also states that corruption has almost completely 
eroded the trust and confidence of U.S. officials in the integrity of 
Mexican law enforcement. The report notes that at least five senior 
Mexican officers involved in the Border Task Force program have been 
arrested on suspicion of taking bribes from the drug cartels, 
participating in the kidnaping of key witnesses or stealing confiscated 
cocaine.
  One former Mexican federal police commander in charge of intelligence 
gathering for the Border Task Forces was fired last year for taking 
bribes from the cartels. U.S. and Mexican law enforcement officials now 
have identified this individual as a suspected drug trafficker in 
Arizona, but U.S. requests for information from Mexico about his 
activities have gone unanswered. How is that ``full cooperation?'' I 
can tell you that U.S. law enforcement officials do not think this is 
full cooperation--Tom Constantine, the head of the DEA said as much in 
a recent Senate hearing.
  Mexico also has failed to cooperate in another key area: extradition. 
Once again, the Administration claims that Mexico has increased its 
willingness to cooperate with the United States on extradition. Yet, 
once again, there is no evidence that Mexico has made efforts to 
capture and extradite to the U.S. for trial any high-ranking Mexican 
national drug lords. Our law enforcement officials risk their lives 
gathering information to obtain indictments against Mexican drug 
traffickers, yet very few are ever captured and sent here for trial. In 
fact, the President's own 1998 International Narcotics Control Strategy 
Report, which is full of information which is supposed to justify the 
President's decision, states that ``to date, no major Mexican drug 
traffickers have been extradited to the United States.'' To this 
Senator, that is unacceptable.
  Mr. President, I realize that drug related violence has become an 
epidemic in Mexico. The recent death of Amado Carillo Fuentes, the 
cartel kingpin known as ``the Lord of the Skies,'' has lead to 
increased violence as the other cartels work to realign themselves in 
an attempt to take over Carillo's turf. In fact, recent reports are 
that two of the largest remaining Mexican cartels (the Caro Quintero 
and Arellano Felix organizations) have joined together to form ``The 
Federation''--the largest drug cartel in Mexico. This presents new and 
more difficult law enforcement questions for the United States and 
Mexico.
  But until recently, I did not realize how deeply the drug cartels 
have become embedded in Mexican and even parts of U.S. popular culture. 
Then I read a March story in the Washington Post about 
``narcocorridos,'' Mexican folk ballads which tell stories about the 
violent exploits of drug smugglers. Narcocorridos glamorize drug-
related shootouts with the police, betrayals, paid executions and the 
wealth associated with narcotics trafficking. There apparently are 
hundreds of music groups recording and singing these songs, which are 
wildly popular in Mexico and parts of southern California. That is a 
disturbing comment on the power the drug cartels possess.
  Mr. President, I have not sought recognition today simply to talk 
about Mexico's shortcomings and what I believe are the flaws in the 
President's certification decision. I realize that the certification 
statute itself is flawed. It's too inflexible and is written in a way 
which leads to the absurd results we have seen with respect to Mexico 
in the last several years. We in Congress have a duty to take a look at 
this law and figure out a way to fix it.
  So today with my colleagues from other border states, we have 
introduced a bill which I believe is a good starting point in the 
debate about the certification process. Our bill would take what I 
think are two important steps in improving the certification statute. 
The bill: (1) provides the President with a new option, called 
``qualified certification''; and (2) emphasizes the important 
contribution our drug-fighting U.S. law enforcement agencies make by 
giving them a greater role in the certification process.
  Under our bill, the President would no longer be forced to make the 
decision between ``full certification'' or decertification, as is the 
case under current law. The fatal flaw of the certification statute is 
that it rigidly requires the President to make a choice between ``full 
cooperation'' and ``no cooperation'', when in reality many countries 
fall somewhere in between.
  Our bill allows the President to make a ``qualified certification'' 
of countries which have cooperated with the United States, but have 
failed to make adequate progress in certain areas. Countries which 
receive a designation of qualified certification would continue to be 
eligible for the full spectrum of multilateral and bilateral 
assistance--they would not be penalized as they are if they are de-
certified.
  Instead, qualified certification would trigger the creation of a 
high-level contact group headed by the Attorney General and consisting 
of the Secretary of State, the heads of the DEA and FBI, the Drug Czar 
and others. The members of the contact group would be tasked with 
meeting with their high ranking counterparts in other countries to set 
measurable goals relating to law enforcement matters like extradition, 
eradication, money laundering or other appropriate counter-narcotics 
concerns.
  The President then would consult with the Attorney General and issue 
a report to Congress setting forth the goals established by the high-
level contact group and report back the following year on the progress 
made in meeting those goals. The President also would be required to 
take a country's progress into consideration when making the 
certification decision the following year.
  Mr. President, I have long believed that law enforcement agencies are 
capable of providing the most accurate picture of whether a country has 
fully cooperated with our anti-drug efforts. I also have felt that the 
certification statute is too rigid, too punitive and fails to recognize 
the critical role U.S. law enforcement plays in our counter-narcotics 
strategy. I think this bill is a step in the right direction, a step 
towards fixing the certification process. I thank my colleague from 
Texas.
                                 ______
                                 
      By Mr. KYL:

[[Page S1887]]

  S. 1752. A bill to authorize the Secretary of Agriculture to convey 
certain administrative sites and use the proceeds for the acquisition 
of office sites and the acquisition, construction, or improvement of 
offices and support buildings for the Coconino National Forest, Kaibab 
National Forest, Prescott National Forest, and Tonto National Forest in 
the State of Arizona; to the Committee on Energy and Natural Resources.


                      forest services legislation

  MR. KYL. Mr. President, the U.S. Forest Service is interested in 
exchanging or selling six unmanageable, undesirable and/or excess 
parcels of land in the Prescott, Tonto, Kaibab and Coconino National 
Forests. If the parcels are sold, the Forest Service wants to use the 
proceeds from five of these sales to either fund new construction or 
upgrade current administrative facilities at these national forests. 
Funds generated from the sale of the sixth parcel could be used to fund 
acquisition of sites, or construction of administrative facilities at 
any national forest in Arizona. Transfers of land completed under this 
bill will be done in accordance with all other applicable laws, 
including environmental laws.
  Mr. President, this bill will enhance customer and administrative 
services by allowing the Forest Service to consolidate and update 
facilities and/or relocate facilities to more convenient locations. It 
offers a simple and common-sense way to enhance services for national 
forest users in Arizona, and to facilitate the disposal of 
unmanageable, undesirable and/or excess parcels of national forest 
lands.
  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. 1752

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

     SECTION 1. DEFINITIONS.

       In this Act, the term ``Secretary'' means the Secretary of 
     Agriculture.

     SEC. 2. SALE OR EXCHANGE OF ADMINISTRATIVE SITES.

       (a) In General.--The Secretary, under such terms and 
     conditions as the Secretary may prescribe, may sell or 
     exchange any or all right, title, and interest of the United 
     States in and to the following National Forest System 
     administrative sites:
       (1) The Camp Verde Administrative Site, comprising 
     approximately 213.60 acres, as depicted on the map entitled 
     ``Camp Verde Administrative Site'', dated April 12, 1997.
       (2) A portion of the Cave Creek Administrative Site, 
     comprising approximately 16 acres, as depicted on the map 
     entitled ``Cave Creek Administrative Site'', dated May 1, 
     1997.
       (3) The Fredonia Duplex Housing Site, comprising 
     approximately 1.40 acres and the Fredonia Dwelling Site, 
     comprising approximately 1.58 acres, as depicted on the map 
     entitled ``Fredonia Duplex Dwelling, Fredonia Ranger 
     Dwelling'', dated August 28, 1997.
       (4) The Groom Creek Administrative Site, comprising 
     approximately 7.88 acres, as depicted on the map entitled 
     ``Groom Creek Administrative Site'', dated April 29, 1997.
       (5) The Payson Administrative Site, comprising 
     approximately 296.43 acres, as depicted on the map entitled 
     ``Payson Ranger Station Administrative Site'', dated May 
     1, 1997.
       (6) The Sedona Administrative Site, comprising 
     approximately 21.41 acres, as depicted on the map entitled 
     ``Sedona Ranger Station Administrative Site'', dated April 
     12, 1997.
       (b) Exchange Acquisitions.--The Secretary may acquire land 
     and existing or future administrative improvements in 
     exchange for a conveyance of an administrative site under 
     subsection (a).
       (c) Applicable Authorities.--A sale or exchange of an 
     administrative site shall be subject to the laws (including 
     regulations) applicable to the conveyance and acquisition of 
     land for National Forest System purposes.
       (d) Cash Equalization.--Notwithstanding any other provision 
     of law, the Secretary may accept a cash equalization payment 
     in excess of 25 percent of the value of an administrative 
     site in an exchange under subsection (a).
       (e) Solicitations of Offers.--In carrying out this Act, the 
     Secretary may--
       (1) use public or private solicitations of offers for sale 
     or exchange on such terms and conditions as the Secretary may 
     prescribe; and
       (2) reject any offer if the Secretary determines that the 
     offer is not adequate or not in the public interest.

     SEC. 3. DISPOSITION OF FUNDS.

       The proceeds of a sale or exchange under section 2 shall be 
     deposited in the fund established under Public Law 90-171 (16 
     U.S.C. 484a) (commonly known as the ``Sisk Act'') and shall 
     be available for expenditure, until expended, for--
       (1) the acquisition of land and interests in land for 
     administrative sites; and
       (2) the acquisition, construction, or improvement of 
     offices and support buildings for the Coconino National 
     Forest, Kaibab National Forest, Prescott National Forest, and 
     Tonto National Forest.

     SEC. 4. REVOCATIONS.

       (a) Public Land Orders.--Notwithstanding any other 
     provision of law, to facilitate the sale or exchange of the 
     administrative sites, public land orders withdrawing the 
     administrative sites from all forms of appropriation under 
     the public land laws (including the mining laws but not the 
     mineral leasing laws) are revoked for any portion of the 
     administrative sites conveyed by the Secretary.
       (b) Effective Date.--The effective date of a revocation 
     made by this section shall be the date of the patent or deed 
     conveying the administrative site.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 1173. A bill to amend the Internal Revenue Code of 1986 to 
encourage school construction and rehabilitation through the creation 
of a new class of bond, and for other purposes; to the Committee on 
Finance.


          the expand and rebuild america's schools act of 1998

  Mrs. FEINSTEIN. Mr. President, today I am introducing a bill to help 
our public schools reduce overcrowding. The bill is the companion of 
H.R. 2695, a bill introduced by my California colleague, Representative 
Loretta Sanchez, a member of the House Education and Workforce 
Committee.


                            the legislation

  This legislation has several major provisions:
  It provides a tax credit for the bond holders of school construction 
bonds. Under the 1997 Taxpayer Relief Act, schools which meet specific 
criteria can issue ``qualified zone academy bonds.'' The bonds generate 
a tax credit, rather than interest, for the bond holder, but can only 
be used to rehabilitate existing schools, not construct new facilities. 
Our bill allows the credit for school construction, as well.
  It revises the criteria to address high growth areas and increase the 
number of schools who qualify. Under current law, only school districts 
with a poverty rate of 35 percent or more (as measured by participation 
in the school lunch program) and can demonstrate public support by 
raising at least 10 percent of the bond amount from private individuals 
or companies could take advantage of the credit. State education 
officials indicate schools, particularly small districts who need 
federal assistance, have difficulty reaching the private support 
requirement. This bill deletes the private support requirement of 
current law.
  To qualify to use the bonds, the bill requires schools to meet state 
academic achievement standards and to have an average student-teacher 
ratio of 28 to one. Clear student achievement standards are essential 
to make schools accountable for learning and many states are developing 
those standards. California, for example, has adopted math and language 
content standards. Research shows that smaller classes improve learning 
and teaching and California is now implementing a class size reduction 
program in grades K-3.
  Under the bill, bonds may be used if school districts meet one of 
three criteria:
  The school is over 30 years old or the bonds will be used to install 
advanced or improved telecommunications equipment;
  The student growth rate will be at least 10 percent over the nest 5 
years; and
  The construction or rehabilitation is needed to meet natural disaster 
requirements.
  The legislation focuses the tax credit assistance on our most serious 
construction needs. In my State, for example, 60 percent of our schools 
are over 30 years old and our schools must be built to withstand 
earthquakes, floods, El Nino and other natural disasters. California's 
State earthquake building standards can add 3 to 4 percent to 
construction costs.
  The bond program will provide important assistance for school 
districts across America. Because the bonds provide a tax credit to the 
bond holder, the bond is supported by the Federal treasury, not the 
local school district. This helps small and low-income area school 
districts, because low-income communities with the highest school 
rehabilitation/construction needs may have to pay the highest interest 
rates in order to issue the bonds, if they can be issued at all.

[[Page S1888]]

                      school enrollment is soaring

  Our public schools face a daunting challenge for the 21st century. 
This year, a record 52.2 million children will attend America's 
schools, a growth trend that will continue, reaching more than 54 
million by 2007.
  Growth over the next decade will be most severe at the secondary 
school level, with enrollment growth expected to grow by 1.7 million or 
more than 13 percent.
  Nearly one-half of all states will experience a 15 percent growth in 
the number of public high school graduates by 2007.
  More than one-third of the nation's existing schools are currently 
over 50 or more years old and need to be repaired or replaced.
  Unlike the previous baby boom, there will be no sharp decline in 
enrollment after 2007; enrollment will maintain a stable level 
afterwards. Thus, school districts face escalating long-term needs.
  Schools are costly. Modern schools are a significant investment for 
even the wealthiest of communities. Average elementary school 
construction costs are $6.3 million, while average high school 
construction costs exceed $15 million. School facilities can be well 
beyond the reach of many local communities. The federal government 
should become a partner by providing targeted assistance for high 
growth areas.


                        the california challenge

  In California, construction needs are soaring. My state will have the 
nation's largest enrollment increases of all states during the next ten 
years.
  California's 18.3 percent school enrollment rate will triple the U.S. 
rate of 5.7 percent between 1996 and 2006.
  Each year between 160,000 and 190,000 new students enter California 
classrooms.
  California's high school enrollment is projected to increase by 35.3 
percent by 2007. Approximately 920,000 students are expected to be 
admitted to schools in the State during that period, boosting total 
enrollment from 5.6 million to 6.8 million.
  California needs to build 12 new classrooms a day until 2001 just to 
keep up with the growth in student population.
  The California Department of Finance forecasts that the State must 
spend $22 billion on schools during the next decade to keep pace with 
growth and to modernize and repair schools that have been allowed to 
deteriorate.
  Based on growth forecasts, California would need to add about 327 
schools over the next three years just to keep pace with the projected 
growth. Yet these phenomenal construction rates would only maintain 
current use and would not even begin to relieve current overcrowding.
  In addition to new facilities, existing education facilities need to 
be renovated to meet today's learning needs. Today's schools require a 
modern infrastructure, with wiring capable of meeting today's computer 
needs. However, more than 60 percent of California's schools were built 
over 30 years ago. According to the General Accounting Office, 87 
percent of the public schools in California indicate they need to 
upgrade and repair buildings.
  The burden on local school districts is overwhelming school districts 
and local taxpayers. As an example, in order to build it's way out of 
overcrowding, Oceanside School District in San Diego, would need to 
build four elementary schools, two middle schools, and a high school at 
an estimated cost of $110 to $140 million.
  In addition to these pressures, our state, commendably, is reducing 
class sizes in grades K through 3 because smaller classes improve 
teaching and learning. We have the largest pupil-teacher ratios on the 
country and fortunately, are beginning to address what is a most 
serious education problem. But smaller classes mean more classrooms.
  In short, California's needs are immense and States and local 
communities need the federal partner.


                         important to education

  School overcrowding places a heavy burden on teachers and students. 
Studies show that the test scores of students in schools in poor 
condition can fall as much as 11 percentage points behind scores of 
students in good buildings. Other studies show improvements of up to 20 
percent in test scores when students move to a new facility.
  Here are several examples of the toll that crowding is taking in my 
State.
  At Horace Mann Year-round School in Oakland, increasing enrollment 
and class size reductions require some teachers and students to pack up 
and move to a new classroom every month.

  At John Muir Elementary School in San Bruno, one class spent much of 
the year on the stage of the school's multipurpose room as it waited 
for portables to arrive.
  Anaheim City School District has a 6% enrollment growth rate, double 
the state average and recently approved the purchase of 10 portable 
buildings, at a cost of $235,000 to relieve overcrowding.
  This bill will concentrate tax benefits on high growth areas across 
the country and improve education. Teachers and students must be free 
to concentrate on learning, yet school overcrowding undermines the 
health and morale of students and teachers, disrupting the education 
process. Overcrowded schools prevent both teachers and students from 
reaching their full potential.


                   differences from the sanchez bill

  This legislation builds upon existing law, as well as H.R. 2695, 
legislation proposed by Representative Loretta Sanchez in the House. 
The legislation differs from H.R. 2695 in the following respects:
  (1) It expands the type of school construction for which the bonds 
can be used. In addition to construction to relieve overcrowding in the 
Sanchez bill, under this bill bonds may be used to rehabilitate schools 
over 30 years old, improve the communications infrastructure, make 
repairs following a natural disaster and retrofit to meet potential 
disasters.
  (2) This bill does not include the requirement of the Sanchez bill 
that at least 10 percent of the bond proceeds be raised from the 
private sector. I believe this would be a burdensome hurdle for most 
school districts.
  (3) Under H.R. 2695, bonds could be used only by school districts 
with 35 percent or more of their students eligible for food stamps. 
Under this bill, bonds would be available to any district meeting the 
high growth, aging facilities, telecommunications or disaster criteria.
  (4) Representative Sanchez's bill allows only financial institutions 
to claim the tax benefit. Under this bill, any taxpayer as a bond 
holder could claim the credit.
  I believe these changes strengthen the bill and create more financing 
options for school districts.


                               conclusion

  Our Nation's school districts face huge challenges as we move toward 
the 21st century, with a record 52.2 million children this year and a 
growing school population forecast well into the next century. The 
legislation proposes modest, targeted Federal support for school bonds 
in growth areas, offering important assistance to school districts, 
teachers, parents and students. I ask unanimous consent to place the 
legislation and a legislative summary in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1753

       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 ``Expand and Rebuild America's 
     Schools Act of 1998''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Many States and school districts will need to build new 
     schools to accommodate increasing student enrollments; the 
     Department of Education has predicted that the Nation will 
     need 6,000 more schools by the year 2006.
       (2) In response to reduced class mandates enforced by State 
     governments and increased enrollment, many school districts 
     have been forced to utilize temporary classrooms and other 
     structures to accommodate increased school populations, along 
     with resorting to year-round schedules for students.
       (3) Research has proven a direct correlation between the 
     condition of school facilities and student achievement. 
     Recently, researchers found that the test scores of students 
     assigned to schools in poor condition can be expected to fall 
     10.9 percentage points behind the test scores of students in 
     buildings in excellent condition. Similar studies have 
     demonstrated up to a 20 percent improvement in test scores 
     when students were moved from a school with poor facilities 
     to a new facility.

[[Page S1889]]

       (4) While school construction and maintenance are primarily 
     a State and local concern, States and communities have not, 
     on their own, met the increasing burden of providing 
     acceptable school facilities, and the poorest communities 
     have had the greatest difficulty meeting this need.
       (5) Many local educational agencies have difficulties 
     securing financing for school facility construction and 
     renovation, especially in States that require a \2/3\ 
     majority of voter approval for the passage of local bond 
     initiatives.
       (6) The Federal Government, by providing interest subsidies 
     and similar types of support, can lower the costs of State 
     and local school infrastructure investment, creating an 
     incentive for businesses to support local school 
     infrastructure improvement efforts.
       (7) The United States competitive position within the world 
     economy is vulnerable if America's future workforce continues 
     to be educated in schools not equipped for the 21st century. 
     America must do everything in its power to properly educate 
     its people to compete in the global marketplace.

     SEC. 3. PURPOSE.

       The purpose of this Act is to help local educational 
     agencies bring all public school facilities up to an 
     acceptable standard and build the additional classrooms 
     needed to educate the growing number of students who will 
     enroll in the next decade.

     SEC. 4. CREDIT TO HOLDERS OF SCHOOL CONSTRUCTION BONDS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business-related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45D. CREDIT TO HOLDERS OF SCHOOL CONSTRUCTION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a school construction bond on the credit allowance date 
     of such bond which occurs during the taxable year, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter for such taxable year the amount determined under 
     subsection (b).
       ``(b) Amount of Credit.--The amount of the credit 
     determined under this subsection with respect to any school 
     construction bond is the amount equal to the product of--
       ``(1) the credit rate determined by the Secretary under 
     section 1397E(b)(2) for the month in which such bond was 
     issued, multiplied by
       ``(2) the face amount of the bond held by the taxpayer on 
     the credit allowance date.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than under this section and subpart C thereof, 
     relating to refundable credits) and section 1397E.
       ``(d) School Construction Bond.--For purposes of this 
     section--
       ``(1) In general.--The term `school construction bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for a qualified purpose with respect to a 
     qualified school established by an eligible local education 
     agency,
       ``(B) the bond is issued by a State or local government 
     within the jurisdiction of which such school is located,
       ``(C) the issuer--
       ``(i) designates such bond for purposes of this section, 
     and
       ``(ii) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance, and
       ``(D) the term of each bond which is part of such issue 
     does not exceed the maximum term permitted under section 
     1397E(d)(3).
       ``(3) Qualified school.--
       ``(A) In general.--The term `qualified school' means any 
     public school which is established by and operated under the 
     supervision of an eligible local education agency to provide 
     education or training below the postsecondary level if--
       ``(i) such public school is designed to enhance the 
     academic curriculum, increase graduation and employment 
     rates, and better prepare students for postsecondary 
     education and the workforce,
       ``(ii) students in such public school will be subject to 
     the academic achievement standards and assessments 
     established by the State,
       ``(iii) a program to alleviate overcrowding and to improve 
     students' education has been constructed,
       ``(iv) the average student-teacher ratio for the school 
     district in which such school is located as of the date of 
     the issuance of the bonds is at least 28 to 1, and
       ``(v) at least 1 of the following requirements is met:

       ``(I) The proceeds from the issuance of the bonds will be 
     used for new school construction, the rehabilitation of 
     school facilities which are more than 30 years old as of the 
     date of such issuance, or the provision of advanced or 
     improved communications infrastructure.
       ``(II) There is a reasonable expectation (as of the date of 
     issuance of the bonds) that the student growth rate over the 
     next 5 years for the school district in which such public 
     school is to be located will be at least 10 percent.
       ``(III) Construction or rehabilitation activities are 
     needed as the result of natural disasters or to mitigate the 
     cost of potential disasters.

       ``(B) Eligible local education agency.--The term `eligible 
     local education agency' means any local educational agency as 
     defined in section 14101 of the Elementary and Secondary 
     Education Act of 1965.
       ``(4) Qualified purpose.--
       ``(A) In general.--The term `qualified purpose' means, with 
     respect to any qualified school, constructing or 
     rehabilitating a school facility.
       ``(B) School facility.--The term `school facility' means a 
     public structure suitable for use as a classroom, laboratory, 
     library, media center, or related facility whose primary 
     purpose is the instruction of public elementary or secondary 
     students. Such term does not include an athletic stadium, or 
     any other structure or facility intended primarily for 
     athletic exhibitions, contests, games, or events for which 
     admission is charged to the general public.
       ``(e) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national school 
     construction bond limitation for each calendar year. Such 
     limitation is $1,400,000,000 for 1999 and 2000, and, except 
     for carryovers as provided under the rules applicable under 
     paragraph (2), zero thereafter.
       ``(2) Allocation of limitation.--
       ``(A) State allocation.--The national school construction 
     bond limitation for a calendar year shall be allocated by the 
     Secretary among the States on the combined basis of the 
     following factors:
       ``(i) The respective populations of individuals below the 
     poverty line (as defined by the Office of Management and 
     Budget).
       ``(ii) The respective projected growth rates in the number 
     of students over the next 5 years and 10 years (as determined 
     by the Secretary of Education).
       ``(B) School allocation.--The limitation amount allocated 
     to a State under the subparagraph (A) shall be allocated by 
     the Secretary of Education to qualified schools within such 
     State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (d)(1) 
     with respect to any qualified school shall not exceed the 
     limitation amount allocated to such school under paragraph 
     (2)(B) for such calendar year.
       ``(4) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the limitation amount for any State, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (d)(1) with respect to qualified 
     schools within such State,

     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess.
       ``(f) Other Definitions.--The definitions in subsections 
     (d)(6) and (f) of section 1397E shall apply for purposes of 
     this section.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section.''
       (b) Conforming Amendment.--The table of sections for 
     subpart D of part IV of subchapter A of chapter 1 of such 
     Code is amended by adding at the end the following new item:

``Sec. 45D. Credit to holders of school construction bonds.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after December 31, 1998.
                                                                    ____


 Feinstein Legislation to Provide Tax Credits for School Construction 
                                 Bonds


                          Proposed Legislation

       Provides a tax credit for school construction and 
     rehabilitation bonds. Similar to the ``Qualified Zone Academy 
     Bonds'' created by the 1997 Taxpayer Relief Act, bondholders 
     would receive a tax credit, rather than interest.
       To qualify to use the bonds, schools must meet state 
     academic achievement standards and have an average student-
     teacher ratio of 28 to 1.
       Bonds may be used if school districts meet one of three 
     criteria:
       (1) The school is over 30 years old or the bonds are used 
     to provide advanced or improved telecommunications 
     infrastructure;
       (2) Student growth rate will be at least 10 percent over 
     the next 5 years;
       (3) School construction or rehabilitation is needed to meet 
     natural disaster requirements.
       Bond proceeds could be used for both new construction and 
     rehabilitation of existing school facilities, unlike the QZAB 
     law, which could be used only to rehabilitate existing 
     schools.
       Bonds could be used to rebuild following a natural disaster 
     or mitigate the potential cost of future natural disasters. 
     The school bonds can help communities rebuild following a 
     tornado or earthquake, as well as retrofit buildings to 
     reduce the potentially devastating cost of future disasters.
       Any bond holder is eligible to claim the credit. While only 
     banks could claim the QZAB bond tax credit, the new bond 
     credit would be available to any purchaser, including other 
     businesses or private citizens.

[[Page S1890]]

                          Education Background

       School overcrowding, the challenge for the 21st century: 
     This year, a record 52.2 million children will attend 
     America's schools, rising to more than 54 million by 2007. 
     Secondary school enrollment is expected to grow by 1.7 
     million, or 13%.
       A National Problem: Nearly one-half of all states will 
     experience a 15% growth in the number of public high school 
     graduates by 2007.
       Facilities for Today's Needs: More than \1/3\ of the 
     nation's existing schools are at least 50 years old and need 
     to be repaired or replaced. The GAO reports fewer than half 
     of the public schools have sufficient technology 
     infrastructure, including phone lines, and wiring for 
     networks.
       Addressing a Long Term Need: Unlike the previous ``baby 
     boom,'' school enrollment is not expected to decline after 
     2007. Communities will face a long-term funding challenge for 
     school construction and rehabilitation.
                                 ______
                                 
      By Mr. FRIST (for himself, Mr. Kennedy, Mr. Jeffords, Mr. 
        Bingaman, Mr. Cochran, and Mr. Inouye):
  S. 1754. A bill to amend the Public Health Service Act to consolidate 
and reauthorize health professions and minority and disadvantaged 
health professions and disadvantaged health education programs, and for 
other purposes; to the Committee on Labor and Human Resources.
  Mr. FRIST. Mr. President, I rise to introduce the Health Professions 
Reauthorization Act. First, I would like to tell you a story 
illustrating the importance of this legislation, which strives to 
increase the numbers of health practitioners in rural, underserved 
areas, to increase the number of underrepresented minorities and focus 
on primary care. My story is about a young man who dreamed of a career 
in medicine. Keith Junior, grew up in Nashville. During his high school 
years, he often visited the Meharry Medical College campus where he was 
warmly received and encouraged by the health care professionals and 
staff. Meharry's Health Careers Opportunity Program, (HCOP) helped him 
develop his academic skills and supplement his undergraduate 
experiences, in a supportive environment with a rich history and caring 
spirit.
  After completing college, Mr. Junior pursued an application to 
medical school. However, his undergraduate grades and MCAT scores were 
considered low. The HCOP program helped him to improve those scores. 
Because Meharry has a commitment to students who demonstrate a 
potential for success which might be otherwise overlooked by other 
institutions he applied there, was accepted and graduated.
  Dr. Junior recalls his experiences in the Meharry HCOP as invaluable 
in helping him to realize his dream of a career in medicine. He is now 
an internist and Interim Director of the Matthew Walker Health Center 
in Nashville, Tennessee. More important, he serves as a role model of 
success for younger generations to emulate.
  Mr. President, this story illustrates the many real life successes 
for individuals who benefit from the Title VII and Title VIII programs, 
of the Public Health Service Act. I rise today to introduce the Health 
Professions Reauthorization Act of 1998 which funds those programs. For 
many years this legislation has helped our nation's schools of health 
to serve the health needs of their communities better and to prepare 
the practitioners of the future.
  A critical component of the Title VII and VIII programs has been the 
goal to help students in need. These programs have often represented 
the assistance of last resort for many disadvantaged students seeking 
careers in health. I believe several schools in Tennessee tell this 
story well: in the East Tennessee State University Schools of Medicine, 
Nursing, Public and Allied Health approximately 89% of their students 
are deemed disadvantaged by the Free Application for Federal Student 
Aid. Both East Tennessee State University's College of Nursing and the 
James Quillen College of Medicine are featured in the ``1998 Best 
Graduate Schools,'' published by U.S. News and World Report. These 
schools were praised for their programs in rural medicine. I am 
extremely proud of these programs because they have been given national 
recognition for their mission which is to train primary health care 
professionals and to encourage an interest in serving rural areas.
  Equally important is this legislation's goal to fill the health care 
needs of many underserved communities, often in rural or inner city 
areas. With the assistance of Title VIII programs, the Vanderbilt 
School of Nursing reports that 72 percent of its 1997 graduating class 
is working in medically underserved areas. East Tennessee State 
University was also able to open the first nurse-managed primary care 
clinic in rural Appalachia with pretty impressive results: 7,663 
primary care visits, 25% of which were preventive services; 51% of the 
patients were covered by Tennessee's Medicaid Program (TennCare) and 
16% of the patients were uninsured; 54% of the visits were care for 
children under the age of 18.
  The examples from my medical colleagues in Tennessee are 
representative of the needs and results elsewhere in the nation due to 
the Health Professions Act, and I believe the revisions made in this 
bill continue to strengthen these programs and prepare us for the next 
century.
  This bill reauthorizes the programs funded through Titles VII and 
VIII of the Public Health Service Act. They are intended: to improve 
the distribution of health professions workers to underserved areas; to 
strengthen the infrastructures of organizations which facilitate their 
training and performance; to improve accountability for federal dollars 
used in these processes; and to improve the representation of 
minorities and disadvantaged individuals in the health professions, 
better reflecting the communities which they serve.
  However, more importantly, this bill represents an opportunity to 
improve the quality of, and access to, health care for millions of 
Americans. Why?
  It is the only measure to counter the maldistributions caused by 
current Graduate Medical Education programs and market forces. Patients 
in underserved areas depend on programs funded by this bill in order to 
receive their health care. Training providers in these areas greatly 
increases the likelihood they will work in these areas when they 
complete their education.
  It is an example of our government's ability to act as a catalyst. 
Too often we, as legislators, are forced to step in and micro manage 
such health care issues as hospital lengths of stay in order to 
preserve quality of care.
  I believe we are far better served to develop programs that stimulate 
the types of efforts which create innovative solutions for these 
problems, and give practitioners/clinicians the tools necessary to make 
needed changes.
  It fosters collaboration. Although foundations are still being laid, 
the many interest groups involved in this bill are learning to work 
together. They have discovered that they do have areas of common 
interest and they are learning to build on those incentives. Within 
many institutions new interdisciplinary programs are being developed 
and this legislation further stimulates those activities.
  Finally, over time, this bill will streamline care and improve cost-
effectiveness.
  Although its costs are quite small when compared to other health care 
measures, we still see it as an opportunity to set an example of 
efficient, high quality care.
  Over the years, there have been many successes among the more than 
300 programs funded through this legislation. Thus, clarification of 
the goals and objectives of these programs is a priority. We had to 
find ways to function within our budgetary constraints as well.
  In 1995, Senators Kassebaum, Kennedy and I attempted to take the 44 
programs involved and consolidate them into 6 groups or clusters. 
Performance outcomes were added. This approach was used to streamline 
the granting process, and to allow HHS to use budgetary factors: to 
leverage areas of development; and to align with community workforce 
needs.
  It also provided flexibility for strategic planning of the workforce 
supply, and insured a greater percentage of program dollars would go 
directly to grantees versus federal administration. Further, the FY98 
Appropriations bill passed by the Senate, also clustered these 
programs.
  After the Act passed in the Senate in 1996 but failed to pass in the 
House, I re-examined it to identify areas of disagreement. Over the 
past year, I made a concerted effort to overcome those obstacles. 
Another hearing was held on

[[Page S1891]]

April 25, 1997 because I wanted to be sure that I listened to all 
parties and that all possibilities for compromise were addressed. My 
staff has worked very hard to maintain that level of input. We sought 
to involve the many constituency groups in the preparation of this 
legislation. The 1998 Health Professions Reauthorization Act 
accomplishes the goals passed by the Senate last year in several ways:
  It still uses only 7 clusters, but has 15 lines of authority as well. 
This approach, while more complex is also more reflective of both 
existing and potential alliances. It gives security about funding to 
groups within these clusters, and in turn, allows them to plan longer 
range.
  Flexibility is built into the bill over time. As funding lines 
change, the Secretary's authority to move funds across program lines 
increases. Thus, programs can grow into the cluster concept. This 
revision will better reflect the constantly changing healthcare needs 
of communities and more rapidly changing health care delivery system.
  Since so much of the Act's flexibility is based on the discretion of 
the Secretary, we have added advisory councils to insure that the view 
points of those on the front lines are heard. This will restore 
confidence among the grantees and encourage positive collaboration 
between agency officers and the programs they manage. In addition, 
these councils will report back to Congress to assure oversight of 
these programs.
  To encourage independence from federal funding, matching requirements 
for non-federal funds are required wherever appropriate. Federal 
dollars provide the seed money necessary for many health clinics to get 
on their feet, and in turn secure other financing mechanisms.
  Programs which attempt to resolve cultural barriers, especially those 
related to language, are restored.
  Community-based organizations are empowered so that the patient's 
voice can be heard.
  Geriatric initiatives have been strengthened and expanded to train 
health care personnel as we promote and integrate geriatrics into 
American medicine. Today there are 33 million older Americans, and by 
2030 it is expected that the elderly population will reach 66 million 
strong, when 1 of every 5 Americans will be 65 years of age or older.
  Mr. President, I am proud of our work. In fact, I would like to take 
this opportunity to specifically thank, Senators Kennedy, Jeffords, 
Bingaman, Representative Becerra, the Hispanic Caucus and all their 
staffs for their efforts to work with us on this bill. I would also 
like to thank the interest groups which gave so generously of their 
time and support to help us address the issues involved. In particular, 
I would like to mention several organizations which have sent me 
letters of support. I have heard from the Area Health Education 
Centers, American Psychological Association, American Mental Health 
Counselors, The Association of Minority Health Profession Schools, The 
Working Group on Hispanic Health-Education, American Nurse Association, 
American Organization of Nurse Executives, The American Geriatric 
Society, National Association of Geriatric Education Centers, and the 
National Association of Social Workers. Mr. President, I ask unanimous 
consent that a list of organizations supporting this legislation and 
their comments, be included in the Record. Mr. President, I especially 
thank Dr. Debra Nichols and Dr. Mary Moseley of my staff for their 
dedication and hard work toward the reauthorization of these programs.
  Mr. President, this bill encourages collaboration without forcing it. 
It creates new partnerships while supporting existing ones. It fosters 
new opportunities for change. It represents the best example of team 
work among interest groups, agencies and legislators. The 1998 Health 
Professions Reauthorization Act will prepare underserved areas to meet 
the future.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the items were ordered to be printed in the 
Record, as follows:
  (The bill was not available at time of printing.)

                           Letters of Support

       ``We are especially appreciative of having had the 
     opportunity in April 1997 to testify before your 
     subcommittee. Thus seeing the nation's 43 Geriatric Education 
     Centers (GECs) in this bill (as Sec. 753 within a grouping of 
     ``interdisciplinary, Community Based Linkages'') is indeed 
     gratifying, as this signifies your commitment to better 
     health care for older Americans.''--National Association of 
     Geriatric Education Centers.
       ``It is our pleasure to write in support of your 
     legislation reauthorizing federal health professions training 
     programs. We believe that our institutions, and our students 
     who become health professionals, will be able to help solve 
     the national crisis of disproportionately low health status 
     among minorities.''--The Association of Minority Health 
     Professions Schools.
       ``. . . the Working Group on Hispanic Health Education has 
     worked in partnership with your office on this Health 
     Professions Bill. Moreover, we have worked with the 
     Congressional Hispanic Caucus, the Association of Minority 
     Health Professions Schools, the Office of Minority Health, 
     and HRSA Bureau of Health Professions in development of the 
     Bill to amend the Public Health Service Act to consolidate 
     and reauthorize health professions and minority and 
     disadvantaged health education programs.''--Working Group on 
     Hispanic Health--Education.
       ``I certainly want to thank you for the careful work and 
     the relevant content of your draft Bill. Your staff carefully 
     considered each of the issues of importance to the Area 
     Health Education Centers across the nation, the 36 programs 
     supporting 157 community based centers.''--Kentucky Area 
     Health Education Center (AHEC) Program.
       ``Your bill, which proposes to continue support for HRSA's 
     health professions education and training programs, was 
     drafted in consultation with all concerned parties, and that, 
     Mr. Chairman, is appreciated.''--Association Of Schools Of 
     Public Health.
       ``We are pleased that Congress has continued to appropriate 
     adequate levels of funding for Title VII programs, but we 
     know that these programs are particularly vulnerable as long 
     as the health professions training programs remain 
     unauthorized. NASW believes the proposed legislation will 
     help increase access by minorities and disadvantaged people 
     to graduate programs in behavioral and mental health 
     practice, including social work.''--National Association Of 
     Social Workers.
       ``This legislation would make graduate students in mental 
     health counseling programs eligible to receive National 
     Institute of Mental Health (NIMH) training grants. The bill 
     allows for mental health counselors to serve in designated 
     underserved health professional areas.''--American Mental 
     Health Counselors Association.
       ``Your legislation will accomplish a much needed 
     streamlining and updating of current federal programs in this 
     area. Its enactment will reaffirm the importance of federal 
     health professional education and training support programs 
     in the effort to make sure that all Americans have access to 
     the health care services.''--American Counseling Association.
       ``The bill provides for a structure that will permit a 
     comprehensive, flexible, and effective approach to federal 
     support for nursing workforce development. It is a pleasure 
     to endorse this bill.''--American Nurses Association.
       ``This legislation is of critical importance in ensuring a 
     federal role in nursing education and this bill will foster 
     programs to prepare nurses to meet the healthcare system's 
     need for nursing professionals to: address sicker patients in 
     tertiary care sites; deal with life expectancy for people 
     with chronic conditions; and care for the complex health care 
     needs of an increasingly elderly population.''--American 
     Organization of Nurse Executives.

  Mr. KENNEDY. Mr. President, I commend Senator Frist, Senator 
Bingaman, and Senator Jeffords for their leadership on the bill we are 
introducing today to reauthorize the health professions and nursing 
training and education programs--Titles VII and VIII of the Public 
Health Service Act. This bill is a bipartisan effort to revise and 
strengthen these education and training programs and achieve a more 
effective workforce to meet the health needs of the nation.
  The ongoing national debate on health care has focused largely on the 
problems of access, cost and quality. These issues, however, cannot be 
addressed without also dealing with the need to train qualified health 
providers. No insurance policy can assure good health care without good 
doctors, nurses and other health professionals. No system of quality 
improvement, no matter how sophisticated, can assure good care for 
hospital patients if there are not good doctors and nurses at the 
bedside. Too often, inadequate priority is given to the workforce which 
staffs our health care system.
  As we know, that system is undergoing rapid and dramatic change. 
Today, nearly 60 percent of Americans receive their care through 
managed

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care arrangements. More and more, health care is moving out of 
hospitals and into out-patient or community-based settings. Fewer 
people are being admitted to hospitals and hospital stays are becoming 
shorter. It is essential for the health workforce to adapt to these 
changes. New graduates of health professions schools and practicing 
health providers need the right skills to provide effective patient 
care.
  In addition to these issues, the health care system continues to face 
by nationwide shortages of certain health personnel, serious 
georgraphical imbalances in the types of health professionals, and 
under-representation of providers from minority and disadvantaged 
backgrounds.
  Many types of health professionals are in short supply, including 
geriatricians, pediatric dentists, and allied health, public health, 
and behavioral and mental health professionals. Shortages of physicians 
persist in inner-city and rural areas, leaving many Americans unserved 
or underserved.
  Since 1986, the number of federally designated shortage areas for 
primary care health professionals has climbed by 40 percent--from 1,944 
to 2,597. The Health Resources and Services Administration estimates 
that over 26 million underserved persons live in these areas and that, 
at a minimum, 5,200 additional general practitioners are needed to 
eliminate these shortage areas.
  In addition, most experts agree that there is an imbalance between 
primary care physicians and specialists. In 1931, about 87 percent of 
U.S. physicians were practicing primary care, compared to 33 percent in 
1996. The Council on Graduate Medical Education recommends that the 
physician workforce should consist of 50 percent generalists and 50 
percent specialists. The persistent current imbalance contributes to 
problems of access and cost in our health care system. Primary care 
practitioners are more likely to locate in underserved areas and help 
underserved populations, and they tend to provide care in a more 
comprehensive, appropriate, and cost-effective manner than specialists.
  Across the nation, African Americans, Hispanic Americans, and Native 
Americans are seriously underrepresented in the health professions 
workforce. Their underrepresentation has reduced access to care among 
many of the nation's neediest citizens. African Americans represent 
approximately 12 percent of the U.S. population, but only 2-3 percent 
of the nation's health professions workforce. Hispanics make up nine 
percent of the population but represent only 5 percent of physicians, 
and 3 percent of dentists and pharmacists. This underrepresentation is 
of particular concern because studies show that minority health care 
providers are more likely to locate in underserved communities and 
provide health services to needy populations.
  The health professions and nursing training and education programs we 
seek to reauthorize in this legislation are designed to respond to each 
these concerns.
  The bill reauthorizes programs which provide educational 
opportunities in the health professions for individuals from minority 
and disadvantaged backgrounds. This strategy has been effective in 
increasing the availability and accessibility of health care providers 
to populations who have difficulty obtaining adeaquate health care, 
especially those from low-income and minority populations. Historically 
black colleges and universities have been particularly successful in 
this effort, training more than 50 percent of the nation's African 
American physicians, dentists, and pharmacists. Our bill will continue 
to support these basic efforts. It will also strengthen opportunities 
for Hispanic-serving institutions and institutions with high rates of 
enrollment of Native Americans.
  In addition, the bill will provide continued support for primary care 
practice through ambulatory care training, curriculum improvement, 
faculty development, data analysis and quality assurance. Among 
physicians, this support will address the continued imbalance between 
primary care physicians and specialists. It recognizes the unique gaps 
general internists, general pediatricians, and family physicians fill 
in meeting the needs of the underserved. In other instances, funding 
will be used to improve the supply of other disciplines suffering 
shortages, such as pediatric dentists.

  The bill reauthorizes model community-based, interdisciplinary 
programs to train individuals for practice in underserved settings, 
including remote and border areas. These programs encourage active 
partnerships between community-based programs and medical schools, 
nursing schools, and other health profession schools in their effort to 
provide greater educational opportunities to students, faculty, and 
practitioners in community-based settings to improve the delivery of 
health care.
  Doctors, nurses, and other health professionals can be trained 
together in teams in the community to address the needs of the 
medically underserved. In this way, their training is more in step with 
what they will encounter in the practice world while meeting critical 
needs in the community. These programs include the area health 
education centers, geriatric education centers, the rural 
interdisciplinary training, and allied health training.
  The bill also recognizes the increase in the elderly population and 
establishes a new junior geriatric faculty fellowship program. This 
program will help to address the large shortage in geriatric faculty 
members. Without an appropriate supply of teachers in geriatrics, we 
cannot seriously address the issue of the geriatrician shortage. I want 
to commend Senator Frist and the Administration for working closely 
with us and with the academic community on this issue.
  Finally, the legislation will provide new flexibility in targeting 
resources to meet the current and emerging needs of the nursing 
workforce. The emphasis is on meeting the needs of the underserved. 
Nurse anesthetists, clinical nurse specialists, nurse practitioners, 
and certified nurse midwives play a vital role in providing quality 
care to medically underserved and rural communities, and they deserve 
our support.
  As the health care system continues to change, so too must the 
federal programs intended to assure that America has an appropriate 
health care workforce to staff the health care delivery system. These 
programs are overdue for consolidation and better targeting. The bill 
we are introducing will consolidate more than 40 health professions 
programs into 7 broader authorities more directly focused on key goals. 
This greater flexibility will enable programs to respond more quickly 
to emerging workforce issues in our changing health care system. 
Specific workforce goals will be established and outcomes measured, in 
order to achieve accountability for the funds invested in these 
programs.
  The health professions and nursing education programs under the 
Public Health Service Act are the key mechanisms of the federal 
government has to meet national priorities for the nation's health care 
workforce. The bipartisan sponsors of this bill have worked closely 
with the Administration, the health professions education and practice 
community, and other groups to achieve these goals responsibly and to 
maintain adequate resources. We have worked to advance the central goal 
of these two important titles of the Public Health Service Act--to 
train a health care workforce that can meet the needs of the American 
people, and I look forward to the enactment of this necessary 
legislation.
  Mr. JEFFORDS. Mr. President, today, I am pleased to announce my co-
sponsorship of ``The Health Professions Education Partnerships Act of 
1998.'' My colleague Senator Frist, the Chair of the Labor and Human 
Resources Committee's Subcommittee on Public Health and Safety, has 
drafted this legislation reauthorizing the important programs contained 
in Titles VII and VIII of the Public Health Service Act. This 
legislation provides comprehensive, flexible, and effective authority 
for the support of health professions training programs and the related 
community-based educational partnerships. The enactment of this Act 
will improve health workforce quality, diversity, and the distribution 
of funds while requiring greater accountability of both the grant 
recipients of federal funds and the agency that administers them.
  Titles VII and VIII of the Public Health Service Act have provided 
programs of support to health professions schools and their students, 
for the past

[[Page S1893]]

thirty-five years. As these programs have evolved, there has been a 
continuing need to address the specific concerns of rural and inner-
city communities that experience shortages of health professionals and 
a lack of primary care providers. This reauthorization will allow the 
Title VII and VIII programs to set improved goals and outcomes measures 
and it also provides them with greater flexibility in establishing 
priorities to target emerging workforce issues.
  In my own State of Vermont, the students of the University of 
Vermont's College of Medicine have benefited from a number of these 
programs and scholarships, including those relating to family medicine, 
professional nurse and nurse practitioner training.
  The newest Title VII program in Vermont is the Area Health Education 
Center (AHEC) which opened its first site in April 1997 in the 
Northeast Kingdom of Vermont. The AHEC will decentralize health 
professions education by having portions of the training provided in 
primary medical personnel shortage areas and by improving the 
coordination and use of existing health resources. Over the next two 
years, two additional sites are planned in other underserved areas of 
the state. These efforts have contributed to making Vermont a better 
place to obtain health care services and improved the quality of life 
for its residents.
  Again, I want to thank Senator Frist and his excellent staff for 
their dedication and hard work in drafting the ``Health Professions 
Education Partnership Act of 1998.'' Enactment of this legislation will 
improve health professions training programs across America and, as the 
Chair of the Labor and Human Resources Committee, I intend to make its 
passage one of our highest priorities.
  Mr. BINGAMAN. Mr. President, I rise today to join Senators Frist and 
Kennedy and Jeffords in the introduction of legislation to reauthorize 
Titles VII and VIII of the Public Health Service Act. I am pleased to 
be part of this bipartisan effort to reauthorize the programs that help 
shape the pool of qualified health care professionals for the United 
States.
  Titles VII and VIII were originally enacted to address a critical 
health manpower shortage and successfully served to increase the 
overall supply of providers. The mission of Title VII and VIII has 
evolved as the delivery system and needs of the population have 
shifted. Today, the focus of the various programs rests within three 
main areas. The programs are aimed to solve the shortages in rural and 
inner city communities. They strive to address the shortage of primary 
care providers and finally must correct the disparity in minority 
representation in the health professions. Indeed, the various programs 
in this legislation serve to provide a base for strengthening the 
health resources for this country.
  In my home state of New Mexico, 28 out of 33 counties are designated 
as health professional shortage areas by the federal government. I am 
acutely aware of how a maldistribution of health care providers can 
impact our citizens. Geographic access to the appropriate health care 
provider is an important factor in our debates on the health care 
system. Titles VII and VIII are noteworthy avenues to address the needs 
in this area. Studies have shown that if we recruit individuals from 
the shortage area, the likelihood is much greater that they will return 
to practice in the area. Additionally, if clinical training is 
community based in rural and underserved areas, the likelihood is also 
increased that upon graduation, the provider will serve in the locality 
in which they trained.
  Equally important for a state such as mine is the commitment to 
address the persistent and unmet health care need along the border 
between the United States and Mexico. The health education and training 
centers in the legislation address the community health needs and the 
training and educational needs of health professionals serving in these 
areas. The legislation also has the capacity to expand and improve the 
public health workforce which is a major component of addressing border 
health concerns.
  Mr. President, this legislation restructures the act to address the 
health workforce needs of our nation in a flexible, but more 
accountable manner. We have provided for data collection and analysis 
of the health workforce so that decision making for the future can be 
well founded and be an accurate reflection of societal needs. 
Additionally, this legislation affords us the opportunity to provide 
education and training that reflect changes in an evolving health care 
system. As managed care and other forces shift the delivery system from 
inpatient hospital care to outpatient facilities, it is necessary to 
respond to the shifts that this causes in the workforce. To this end, 
the legislation addresses the curriculum development in the areas of 
health promotion and disease prevention as well as long term care, home 
health and hospice.
  As the demographics of our population shift to an older population, 
we must ensure we have qualified individuals to treat the specific 
nature of chronic diseases associated with geriatrics. As we deal with 
an aging population, establishing interdisciplinary training programs 
that promote the role of nutritionists, physical therapists, 
occupational therapists and speech therapists in geriatrics are 
critical. The legislation provides an avenue to address these necessary 
components.
  Finally, the reauthorization provides a framework to better monitor 
the outcomes of our efforts. It continues to afford us the opportunity 
to assure an appropriate number and mix of health professionals for the 
health needs of the country. It strengthens our commitment to address 
the supply, distribution, and minority representation of health 
professionals through both Native American and Hispanic centers of 
excellence. I have been committed to seeing the needs of these two 
populations addressed. I commend Senators Frist and Kennedy for their 
hard work and the work of their staff to address the various concerns 
raised during our hearings on this important issue. I appreciate the 
work done by the Hispanic caucus in the House and by the minority 
health profession schools as well.
  Mr. President, in closing I want to thank Senators Frist and Kennedy 
and Jeffords for their determination to address the need to reauthorize 
Title VII and VIII of the Public Health Service Act. I appreciate that 
they have worked closely with our colleagues in the House to develop 
companion legislation. I am committed to working with my colleagues 
toward expeditious consideration and passage of this bill.

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